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Asian stocks

>> asian stocks gained on the slide in oil prices and the u.s. rallied. investors are more confident that global economic and profit growth will be sustained. to get a preview of next week’s markets in the asia-pacific region, this report from our tokyo bureau.

>> china’s industrial production and import figures may provide evidencegating restrictions are losing their bite. factory output probably rose and imports of raw materials probably increased in october. the central bank raised its benchmark rate by just over a quarter of 1% on october 29 in an effort to control inflation and stop the economy overheating. figures expected tuesday or wednesday. japan’s economy may be stalling as exports slow. gross domestic product figures out friday may show the economy grew at an annual pace of 2.1% in the third quarter, half the average pace of the previous five quarters. earnings season continues in japan. mitsubishi motors may say monday losses widened in the first half. japan’s only unprofitable automaker recalled more than 200,000 cars in japan this year after admitting covering up defects. domestic sales have fallen every month this year. rising competition in japan’s telecommunications sector may mean lower first-half profits for nippon telegraph and telephone. japan’s largest telco has seen profit decline at docomo phone unit. softbank gives first-half earnings figures wednesday. japan’s second largest provider of high-speed internet services probably had a smaller loss in the first half. it signed up more users to the yahoo broadband service. those are business highlights in the coming week in asia. back to you.

>> turning to next week’s likely market movers in europe, mark barton filed this from the london.

>> 12 of the companies in the dow jones stoxx 50 release results. munich re may report the smallest quarterly profit since the last chief executive took over in january because of an estimated $500 million euros of damage claims for hurricanes in the u.s. the world’s third biggest insurer probably earned 271 million euros in the third quarter compared to last year’s 42 million euro figure. british airways unveiled fiscal second-quarter profit, and may say net income rose 31% after the courier cut jobs and reduced costs. chief executive officer has cut over 13,000 jobs or more than 1/5 of the work force since 2001 to cut costs and counter competition from carriers including ryanair and richard branson’s virgin atlantic airways. tobacco releasing annual results in assessment. the maker of lambert cigarettes said profit in the current fiscal year is in line with management expectations. imperial and european competitors aim to make up the lowest cigarette consumption in the region by buying businesses and combining manufacturing and distribution to cut costs. the company boosted first-half profit by 3.8%. turning to the economy, u.k. producer price data is released. economists expect input prices to rise 2% in the month of october. while the cost of goods leaving factories will probably gain .4% in september. output prices rose at the fastest annual pace in more than eight years after the price of metals and oil jumped. manufacturers such as glass maker pelkington may say that rising raw material costs may crimp earnings. in london for bloomberg news, i’m mark barton.

>> sotheby’s sold $194 million worth of impressionist art as the fall new york art auction season continues. the total is the highest for impressionist art in 14 years. three works sold for more than $20 million each. six artists broke records, among them, paul gauguin, as well as sculptures, including henry moore’s three-piece reclining figure. even so, many of the high profile works fell short. a cardinski sketch fell short. and boogie-woogie had the same estimate but sold lower than expected.

>> the pictures find their prices. when it’s an open market and you saw something was hotly wanted, we had incredibly deep fields of bidding. besides sculpture, we saw tremendous results for late picasso and the comment that impressionism is out of fashion doesn’t really prove true.

>> and it’s not just at sotheby’s. earlier in the week, christie’s sold $128 million worth of impressionism and modern art, its highestital nefour years. the nba season picked off this week as shaquille o’neal arrived in miami. he’s raking in revenue for the heat. mike buteau has more in this week’s “money & sports.”

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Listen Market briefing --- Bob (fast)
Interview: William Donaldson
>> welcome back to “world financial report.” i’m bob bowden. recapping the day on wall street, we saw a rally in stocks with the dow up .7%, s&p 500 up .4% and the nasdaq up .75% finishing at 2038. warren buffett’s berkshire hathaway said profit fell a third straight quarter after hurricanes hammered insurance units. third-quarter net income fell 37% to $1.14 billion or $739 a share. excluding investment gains, net income would have been $402 a share. profit declined in the first and second quarters because of a drop in investment income. storm losses may stabilize prices for reinsurance policy, bolstering future profit. leaders of the securities industry are wrapping up their annual meeting in boca raton, florida. greg miles caught up with securities and exchange commissioner william donaldson and asked him about the reports he may be stepping down.

>> i serve at the pleasure of the president. i also serve at the pleasure of myself, if you will, in terms of feeling that we’re getting some things done. i think we are getting some things done so i guess my answer is, stay tuned.

>> to clarify, have you talked with the bush administration about this?

>> no, i haven’t.

>> so you would expect to stay

>> i don’t want to go further than what i said.

>> fine. let’s talk about the past two years. there have been scandals on wall street with mutual funds, hedge funds and brokers. from your point of view, are the major scandals over?

>> well, you know, it’s hard to answer that question. on the one hand, some of the backlog, if you will, of open investigations has come off some from where it was. that’s an encouraging sign. on the other hand, we are continue ali―continually surprised by things that pop up. my hope is that the worst is behind us but i can’t guarantee it.

>> let’s talk about hedge funds. you’re going to rentalster them, inspect them. is that enough to avoid major abuses in that area? what else remains to be done?

>> let me make clear what we’ve done. the hedge fund industry is heading toward a trillion dollars and we have had no authority or oversight on the industry up until now. what the new rule does is register the hedge funds under the investment advisers act, not the funds, but the managers of the funds. that’s the simple first step, if you will, to find out how many hedge funds there are, who is running them, to have some authority on their books and records, to make sure that they’re pricing securities correctly. what we’re not interested in doing and do not have the authority to do is to regulate what they invest in. if we register the funds under the investment company act, we would have that right but we don’t want to do that. so the first step is to find out what’s anything on in the industry.

>> let’s go to the new york mercantile exchange. a big issue over the past year, eliot spitzer sueing dick grasso to get much of the $140 million back. how important is it for the nyse to get this issue behind it?

>> i think that in effect, the new york stock exchange is moving ahead. i think they’re moving ahead in a number of areas and implementing a new governance structure and bringing new people into the stock exchange so clearly the issue of the past and in particular, the issue you’re referring to, is, i think , i hope to be resolved sooner rather than later.

>> considering smaller investment advisers in order to focus on ruggating hedge funds. is this an indication that the s.e.c. budget has to be bigger?

>> no, no. first of all, we haven’t decided whether we’re going to make that drop. we’ve talked about giving authority for smaller hedge funds to state regulators. but a more important thing is that we need to to devise and we’re in the process of doing that now, a new regime, if you will, for oversight. we call it risk appraisal, if you will. we have a risk management office. we have risk mapping. all of this means that we’re attempting to concentrate our resources, if you will, in areas where we identify risks rather than just generally across the board.

>> that was s.e.c. chairman william donaldson speaking with bloomberg’s greg miles. b.t. group, largest phone company in the united kingdom, will buy infonet services. people familiar with the situation say b.t. is making a move to add a data network spanning more countries. the deal could be announced as early as monday and would need to be approved by a 12-member panel of u.s. government agencies including the pentagon and homeland security departments. verizon is adding to wireless holdings, paying $3 billion to acquire new airwave licenses for its mobile phone unit coming from nextwave, helping verizon wireless offer more services. the move is part of the company’s plan to be the biggest u.s. mobile phone provider. it had been until cingular bought at&t wireless. when we return, six artists set records at sotheby’s auction but there were a number of failures.

Interview: American Express and MBNA
>> american express and mbna are celebrating a new partnership. mbna is launching a new american expression-branded credit card.

>> what we expect to get out of this relationship is, one, that we can substantially expand our scale and relevance. that, in fact, will allow us to grow substantially not only if our network card business but in our proprietary card business because we’ll be bringing more high spending customers to our merchants.

>> and give us a sense how many more merchants do you hope to sign up by linking up with mbna and will you cut fees?

>> what’s important is that we price on value. we believe that we’re offering substantial value to merchants. no merchant is forced to accept our card. we do not have the monopoly position that visa and mastercard has. we price on value. we believe we’re offering substantial value to our merchants.

>> does that mean you will not be cutting fees?

>> i think the key point is, as i said earlier, that we price on value. in some cases, we may offer a lower price. but the reality is, that if we’re generating substantial value and the point i would make is that our average spend compared to visa and mastercard is four times, four times. our spending gap increased in 2003 so we have widened the gap in average spend against visa and mastercard so i think our value proisition has improved.

>> give us a sense how the profits will be split from the venture?

>> i think clearly we’re not going to cover our financial arrangement. what i will simply say is that we have very attractive economics for both partners.

>> credit suisse says you may see a profit gain of five cents a share annually for every 10% of mbna transactions on the amex network. is that in sync with your projections?

>> not going to comment on our financials. what i will say is the economics are attractive. we are leveraging an existing structure so the economics of the network business are very attractive. that’s all that i will say at this point?

>> mr. hammond, how many cards do you expect the amex relationship to add to your portfolio in the next 12 months?

>> we’re not projecting a number on that yet, ellen. it’s early and we have to see the results of our solicitations. i can tell you, we have already talked to over 300,000 customers who have opted into the offer, customers who think that us offering with the affinity group the great american express brand name and rewards programs we’re offering with it in a short period of time we’ve opened up 300,000 accounts. in terms of new customers, we just went out with a nailing -- mailing last friday to millions of potential new customers and it’s too early to know the results of that mailing but we’re very optimistic because only mbna has the number of affinity groups, over 500 affinity groups, we can tailor offers to -- 5,000 affinity groups and only american express has the relationships with the merchants community and putting those two together is an offer we believe no one else will be able to match.

>> give us a sense in terms of how much you. expect this to boost balances? can you tell us balances or the capital you’re setting aside in anticipation of the balance gains?

>> that’s not something we’re projecting but we are targeting our higher spending customers. both new customers in the affinity groups as well as existing customers and even some of our inactive customers we know have high spending on other cards, we’re targeting those for this offer. we believe that our customer base is most like american express’s in that we have a high percentage of customers that are high spending customers and as ken mentioned, how much more the typical american express customer spends as compared to mastercard and visa. our customer spends about twice as much as the typical mastercard or visa customer spends.

>> how much are you budgeting and will that impact earnings?

>> well, we, again, are not forecasting or not putting those numbers out but it will be a very significant marketing effort. on the other side, every time we open a new account, every time we get more spending from our existing customers, it’s going to enhance our profitability over time.

>> that was ken chenault of american express and bruce hammonds of mbna. checking shares at the close, we saw a rally in both american express and mbna. u.s. consumer borrowing in september rose by 9.8 billion dollars as credit card use rebounded, more than that forecast by economists. when we return after the break, the dollar dropped to a record low against the euro and the slide is expected to continue. we’ll talk currencies when we return.

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Listen Market briefing --- Bob (fast)
Jobs report --- Peter (slow)
Fed expectation --- Su (fast)
NYSE --- Julie (slow)

welcome to the friday edition of “world financial report.” i’m bob bowden. the labor department delivered an october surprise. the monthly jobs report exceeded economists’ expectations as the economy created 337,000 jobs last month, the highest level since march. peter cook looks at the numbers from washington.
>> the report showed strength in october and a stronger job market the previous two months than first reported. the headline number, 337,000, almost double the median forecast of 175,000 from economists surveyed by bloomberg. the september number, revised upward by 43,000 from the original 96,000. to 139,000. and august was also revised upward to 198,000.

>> i actually did believe that this number would surprise on the high side, particularly after seeing the election result. i think what it’s telling us is that the august-september numberss being revised upward, that there were downward biases having to do with weather, the real numbers are showing through.

>> the unemployment rate rose to 5.5% as more people returned to the work force, according to the labor department. as many economists expected, the hurricanes played a role in boosting the report. the labor department says the storms contributed to a 71,000 increase in construction jobs and cleanup-related employment, the biggest increase in construction jobs since march of 2000. employment in service producing industries, including retailers, banks and government agency, rose 272,000 last month after 143,000 increase in september, today’s report showed. the increase was the biggest since april. the news for manufacturing, not as good. there was a drop in manufacturing of 5,000 workers and improvement over last month, but not the gain expected. economists warn not to read too much into the october numbers.

>> it’s a wonderful news because it’s a drip, drip, drip of bad news but there is the risk of a head fake if you extrapolate the surprise to the upside into the future and say, oh, we’ve definitely turned a corner in terms of concerns in the job market . a lot of the numbers are services so we have this persistent problem of creating jobs in the manufacturing sector.

>> a few other numbers to share, incomes rose last month as average hourly earnings were up .3%, in line with expectations, and average weekly hours remain the same at 33.8, consistent with expectations expectations. economists’ expectations.

>> treasuries fell the most since july after the job number came out on expectations the federal reserve will raise interest rates twice more this year. checking bonds on the day -- moving on, economists are already changing their view on how aggressively the fed will raise interest rates. deutsche bank and hsbc are among the first to revise their forecasts, saying the federal reserve is now likely to raise rates in december, as well as november. su keenan joins me with more on the fed expectation story.

>> huge surprise, this report, in the word of lehman brothers john cheney, one of many economists admitting they were caught off guard by today’s report.% the report shows jobs grew at three times shin’s prediction and lehman continues to hold the view the fed may not raise rates in december although ethan harri says next week’s interest rate increase is a foregone conclusion.

>> the fed’s basically told us they’re going to hike rates next week. december is a closer call. in the coming few meetings, it will be data dependent. if the data look strong going into the december meeting, if we see numbers as we saw today, they’ll go ahead and hike rates. if things soften back a bit in the next job report, i think there’s a case for the fed holding at the december meeting.

>> you get a clear view from b.n.p. paribas’s fixed income strategist who says the bond market has priced in the moves at each of the next two meetings

>> i think they’ll raise rates again at the december 14 meeting.

>> that takes a pause at the december meeting off the table but i don’t think it changes the landscape sufficiently in terms of the fed stepping up the pace of tightening beyond measured.

>> b.n.p. paribas securities is one of the six banks that predicted last month that the fed would raise rates twice more this year. as we mentioned, after today’s stronger-than-expected report on jobs growth, two primary dealers, hsbc and deutsche bank announced they were changing their forecast and joining the camp predicting two more rate increases this year. they were among 16 banks in the bloomberg survey who predicted last month the fed would not raise rates in december. u.s. trust’s tim mcgee says everything depends on the weeks to come.

>> i think it would be a quarter point next week, which is a done deal. then i think the fed is looking to see what happens between now and the next few weeks to decide about december and if they think they need to, they’ll raise a quarter in december.

>> fed policymakers raised their federal funds target rate a quarter percentage point at each of their last three meetings.

>> thank you, su keenan. moving on. the numbers report is dynamite for the stock market , according to the chief investment officer at huntington capital. the numbers on the day, friday, the dow up .7% -- for more on today’s trading action, here’s a report from julie hyman at the big board.% -

>> a winning day and winning week for both the dow and s&p. we did have shares not close at the highs for the day, but nonetheless, a winning day, the dow rising better than .7% on the better-than-expected jobs report. over on the s&p, the gain was smaller in today’s session for the week, gaining 3.2%, and that’s its best performance on a week in more than a year’s time. as i said, we received a bump in the morning from the better-than-expected jobs report. gains limited by speculation the fed could raise rates twice between now and the end of the year and the fact that the dollar is trading at a record low versus the euro, which could decrease foreign investment in u.s. equities. that said, we saw a strong, broad-based advance today. some of the best performers were shares seen as particularly economically sensitive, including semiconductors, technology hardware as well as auto-related shares and retailers rising again after reporting october same-store sales that beat estimates. on the downside, interest-related shares, israelis companies in particular, that group down 3.1% and other financial related shares, we saw today. diversified financials turning around by the end of the session and insurance finishing just about unchanged. banks still finishing lower. also want to talk about goodyear tire, one of the big gainers today, on an individual basis. it had a profit in the third quarter poised to perhaps beat analysts’ estimates. full results will be released in a week or so. on the down side, we had univision, spanish-language broadcaster saying fourth-quarter profit forecast was coming up short of analysts’ estimates. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> a big winner today, sears shares. that stock jumped 25% after vornado realty―reality trust decide―realty trust decided to invest in the chain. the owner of office buildings and shopping centers now has 4.3% of a stake in sears. analysts say sears, which operates 871 department stores primarily in shopping malls is among retailers trading below the value of its real estate. the dollar tumbled to a record low against the euro on friday or as the chart shows, the euro rising to a record high against the dollar. despite the surge in u.s. job growth, after remarks by gerhard gerhard shroeder suggesting he would tolerate a stronger u.s. currency.

>> if you look at the data on the holdings of marketable securities at the fed for foreign institutions, they’ve really flattened out over the last eight weeks. in contrast to the previous 13 months when it was a very, very strong uptrend. so if foreign central banks aren’t buying as many dollars, the private market becomes skeptical also.

>> the dollar is down nearly 5% over the past month compared to the euro. after the break, american express chief executive ken chenault says the new partnership with mbna sigiant step in the industry.

Decision Economics --- Sinai, Allen---Economist
>> federal prosecutors won convictions involving five people in the accounting fraud that brought down enron. the 5 people were involved in a sham transaction between two companies involving nigerian barges. one defendant if the case was acquitted. in the interest of disclosure, we tell you that merrill lynch is a passive minority investor in bloomberg lp, the parent of bloomberg news. in keeping with the oil theme, baker hughes has received a subpoena from a federal grand jury in new york related to sales of equipment to iraq from 1995 to 2003. baker hughes sold equipment to iraq under the united nations oil-for-food program which enabled the company to use oil revenue to buy food and supplies. he declined to say what was sought in the subpoena. checking shares of baker hughes in the regular session, up 2.4%. senator john kerry’s concession of the presidential race lifted oil futures this afternoon with their biggest gain in two weeks. early on, nymex crude futures fell bow low―below $49 a barrel. it’s the sixth straight weekly increase in stockpiles but bush’s re-election moved crude higher.

>> you could say the election impact kicked in around mid morning when we had the definitive word on the bush victory and it created a u-turn in the direction of oil trading. the u.s. is likely to keep adding oil to its strategic petroleum reserve and filling that reserve takes more than 100,000 barrels a day off the market . earlier today, the driver of trading was the latest energy department report showing supplies of crude oil rose by 6.3 million barrels to just under 290 million barrels, triple the gain analysts anticipated. inventories of heating oil and diesel fuel were down 900,000 barrels. associate director of energy futures with barclays capital is now saying it will be difficult for oil to continue to trade above $50 a barrel in coming weeks.

>> today’s inventory, obviously, a bigger build than people thought, especially in the crude oil. with that, we’ll see the market feel pressure and some people start to take the short side of the market . as far as the rest of the numbers, demand looks like it might be slipping a little bit and it could be because of the warmer weather and distillates and could be because of higher prices in gasoline.

>> art hogan says fears that supply would not meet demand are starting to disappear.

>> the reason oil went from 35 to 55 was the fear of disruptions of supply and there was a huge speculative bid in the marketplace.

>> let’s look at the retracement on the far right hand of the chart. oil dropped roughly 9% since touching an all-time high of $55.67 a baer just over a week ago. looking at heating oil, home heating oil futures rising more than 2%, reversing an earlier drop of 2%, turning around on the election news.

>> on the bloomberg professional service, i have a chart of oil service stocks and how they did on the day and you see halliburton, varco, superior, better than 4% gains on the day and cal dive over 12% on the day. moving on, it was a strategy that did not quite work for general motors and ford. they hoped the new models would boost sales as the companies cut back on incentives but x.m. and ford reported―g.m. and ford reported lower sales. at g.m., u.s. sales of cars and trucks fell 4.7% from a year ago ford sales were down 5%, in line with estimates. it was a different story at the chrysler unit of daimlerchrysler with sales up 2.3% as the company updated new models. looking at investors’ reaction, g.m. shares down 1% and not much movement on ford and daimlerchrysler shares. investors have economic data to consider. the commerce department says factory orders fell for the second consecutive month. demand for cars, aircraft and steel tapered. economists surveyed by bloomberg were looking for an increase but at the same time, the service economy rose at the fastest pace in three months. the institute for supply management’s index of snawn manufacturing -- nonmanufacturing activity came in up three points from september and above analysts’ estimates. any number above 50 indicates expansion. the data shows business picked up for the nation’s retailers, construction firms and financial service providers. returning after the break, what changes and reforms may we see in the second bush administration? we’ll talk with allen sinai of decision economics.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
welcome to “world financial report.”i’m bob bowden.the markets had election certainty. president bush has another four years in the white house after beating democratic senator john kerry. that led to buying at the open. the benchmark stock market indexes closed the day up 1%. you can see the dow, s&p and nasdaq, all three up around the 1% level. the currency markets rabbit reacting to the idea of a second bush term. the prospect for continued higher deficits had been weighing on the dollar today. does bush’s win mean a weaker dollar? consider the following remarks from jim o’neill with goldman sachs. let’s look at the chart of the euro against the dollar to see where we have come and look at the reaction today. this is the euro rising in the last two months or so and this higher euro up to the $1.28 level, that means a lower dollar, higher euro, lower dollar. moving on to the japanese yen chart, and this is a reverse chart and it’s the dollar against the yen and the yen is now 106.19 to the dollar, signaling a weaker dollar. moving to treasuries, prices moving down and yields backing up. the yield on the benchmark 10-year note has risen to a one-month high. you see at 4.07% and the move in price there, down almost a quarter of a point, down 7/32 for the are 10-year. investors speculate the u.s. government needs to borrow more money to finance the record bunet deficit. earlier, we spoke with bill gross, chief investment officer of pimco ask manager of the world’s largest bond fund. he told us why he’s investing in things other than treasuries.

>> our portfolios have been defensive from the standpoint of investing in german bunds as opposed to u.s. treasuries. if you have the potential of less buying from the chinese and japanese at some point down the road and the potential for the federal reserve to be more aggressive than what we see with the e.c.b., then the lagical choice with nearly the same yields is the german bund.

>> coming up in the next half hour, you’ll hear what bill gross is saying about inflation, interest rates and market strategy. drug and defense stocks led the rally on optimism they’ll benefit from president bush’s re-election. here’s our report from julie hyman at the big board.

>> stocks peaked early in today’s session. the s&p 500 actually reached its highest in six months this morning. however, markets eroded earlier gains late in the session. the past couple of hours of the session, in fact. a couple of contributors with oil closing higher and traders saying we had a refocus on the fundamentals. with the election behind us, although people have been positive about a win for president bush, people are now focused on mixed fundamentals, which are earnings, which are slowing down, the economy, looking strong, and the high price of oil. volume falling off heading into the end of the session. this morning, it looked like we were on track to get 1.7 billion shares changing hands and at the end of the day was less than that. drug stocks really outpacing the gains we saw in the overall markets . some of the drug stocks you can see there winning. and this is because a bush win was seen as more positive for the industry, he wouldn’t impose as many price controls or possibly also more gen generics not coming into the market under president bush. an index of h.m.o.’s gaining, about 5.5%. the various h.m.o.’s doing very well. pacificare gaining 19% and defense stocks doing well today because president bush is seen as continuing a high level of defense spending. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> qualcomm is out with its latest results. revenue came in below expectations in the fourth quarter. qualcomm also cut its profit and sales forecast for the current quarter. one analyst says the company is less certain. what they’ll earn in royalties from mobile phone technology. qualcomm reported 23 cents a share in the september quarter and sales came in at $1.12 billion. qualcomm shares were taking a hit in the after hours trading. i suppose still are. for details, we check with june grasso at the nasdaq marketsite.

>> qualcomm reported earnings after the close of trading and let’s see where it is now trading after hours, at $38.75. i want to correct a misstatement during my earlier report on qualcomm. it was briefly, earlier today, at a five-week low, not a five-year low and this stock came back from this level and closed at its only lowest since last week. drug stocks gained because senator kerry talked about expanding production of generic drugs and allowing cheaper drug imports so on president bush’s re-election, the nasdaq biotech index advanced led by amgen. biogen, gilead and kos pharmaceuticals was one of the highest percentage gainers on the nasdaq, reporting third-quarter earnings 20 cents better than estimates and revenue higher than analysts’ estimates. a different story for shares of companies that develop treatment based on using stem cells. they declined after john kerry conceded to president bush, who has limited stem cell research. there you see down stemcells, aastrom, and geron. looking at i.a.c. interactive, led the nasdaq 100 on positive earnings exceeding analysts’ estimates. the internet and television company is controlled by barry diller and said it increased sales of travel reservations on its websites, including expedia, hotels.com and hotwire.com. the telecommunications index was one of the worst performing groups at the nasdaq today. let’s look at research in motion, maker of the blackberry wireless email passenger pager was downgraded by u.b.s. securities to neutral, saying the forecast is volatile because the company is entering new markets with new products. i’m june grasso at the nasdaq marketsite in times square. back to you, bob bowden, in the studio.

>> thank you. appreciate that, june. moving on, shares of google crossed the $200 mark today less than three month of going public at $85 a share. the company raised $1.who billion during the initial public offering. the world’s most used internet search engine said last month third-quarter profit more than doubled as it sold more advertising. the stock trades at about 77 times the average analyst forecast for per-share profit this year. two big winemakersgating about ahead with their merger. robert mondavi agreed to be acquired by constellation brands for the company’s class a stock. constellation offered to purchase mondavi last month. still to come, oil prices turn on a dime. futures are back above $50 a barrel. we’ll tell you what fueled today’s gains.

Election --- Su (fast)

>> president bush’s income and dividend tack cuts failed to spark the market . they all stand below the closing levels before bush’s inauguration on january 22, 2001. the s&p has lost nearly 16% and the dow 5%. on the three indexes, only the s&p is high they are year. some strategists speculate the market may begin to recover after the election, unless there’s a repeat.
>> senator kerry has promised he would kill them for the wealthy for most people who take advantage of it. he has virtually no chance of doing that if the house stays republican. and the only safe bet tonight -- it’s a tough call on a lot of other thing, but the only safe bet is that the house will stay republican.

>> record trade and budget deficits during the bush administration also undermine the dollar. the dollar’s lost 36% of the value against the euro, sailing to a record low in february, now two cents above the low. the losses against the yen were less pronounced down 9.4% since bush took office. japan sold the record amount. shoring up the record budget deficit could boost the dollar. candidate kerry has promised to repeal some of the income and dividend tax cuts to shrink the $415 billion budget sportfall. a task one analyst calls impossible.

>> senator kerry has promised that he would kill them for the wealthy for most people who take advantage of. he has virtually no chance of doing that if the house stays republican. and the only safe bet tonight -- it’s a tough call on a lot of other thing,. the only safe bet is that the house will stay republican.

>> government bond have gained during bush’s term, pushing yields lower if u.s. recession at the start of the bush presidency and recent signs of economic weakness helped lift 10-year bonds even as the ballooning deficit pushed up the size of bond offerings. analysts say drug stocks are among the groups most likely to be effected. merrill lynch analysts predict a victory by senator kerry will hurt the entire group because he supports lower prices. bloomberg’s su keenan has more on the story from new york. what more can you tell us?

>> right now the ability o raise prices drives profit at the nation’s largest drug company, and pricing is the main reason analysts are saying a win by presidential hopeful john kerry could be negative for drug stock. in a note to clients, merrill lynch said basically that a kerry victory would likely result in a move to lower prices through medicare and medicaid. they say there is a riss it can new democratic leadership won’t provide financial incentives for the companies to “play ball and participate in the programs.” merrill also predicts a negative effect for h.m.o.’s and says kerry represents greater uncertainty for the managed care industry. sanford bernstein’s richard evans says you can expect volatile trading for the entire industry group on election day. he says investor concern about the pricing issue will cause a relief rally if bush wins, a selloff if kerry is named the new president.

>> the destination is the same. we’re going to government influence on drug pricing. and you want to drive there or take an airplane? kerry will get you there tomorrow, whereas a bush administration would get you there over a period of years.

>> in evan’s view, companies more reliant on drug revenues, such as pfizer, will be most effected by the election. more diversified are less at risk. when it comes to biotech, the tables are turned. a kerry victory is seen as more beneficial given the sup tort of stem-cell research―the support of stem-cell research.

>> thanks for that, su. the next executive cabinet will probably look different next year. there is wide speculation that secretary of state colin powell does not intend to join a second bush administration. defense secretary donald rumsfeld has come under heavy pressure as well for his handling of the iraq war and the abu ghraib prison scandal. as for treasury secretary john snow, he says he hasn’t made up his mind.

>> i’m honored to be part of the president’s cabinet and serve in his administration, and enormous admiration for him. but that’s an issue that the president and i would need to talk about between ourselves. i serve at his pleasure, and assuming the president is re-elected, i’m sure we will have conversations.

>> two of president bush’s cabinet secretaries resigned during his first term, including treasury secretary paul o’neill and environmental protection agency chief whitman. george tenet and securities and exchange chairman harvey pitt departed from the bush administration. in addition to the president, the u.s. citizens will be picking their representatives and senators today. while all 435 members of the house of representatives face votes t republican party is expected to maintain the majority. 34 senate seats are being contested. that could shift the balance of the upper house of the u.s. congress. republicans currently control 51 seats t democrats 48 with one dependent. most incumbents are expected to hold onto the position. still, races in florida, kentucky, colorado, and six other states are considered too close to call. barclay’s capital raised the one-month euro forecast. the chief strategist at the world’s seventh largest scurn si trader joins us next to sell tel us where the currency is heading after the election.

在线播报
Listen Market briefing --- Catherine Yang (medium)
Election --- Bob (fast)
NYSE --- Julie (slow)
>>good morning and welcome to special u.s. election coverage. i’m catherine yang in hong kong. as part of today’s coverage, we will have live reports every half hour from the u.s. with the latest exit polls in state where is voting has ended. plus, our asian reporters are standing by with special reports on how it may effect economics and business across the region. we have a series of live guests to discuss the issues and interpret the early result. don’t forget, the usually breaking news and business report, we have three live guests in the next hour. first up, the dollar has weakened during the bush president spiff we will talk to a currency strategist for that in 20 minutes. then, we turn our attention to the political issues at stake and the campaign strategies when we talk to a political analyst from prudential. and a stock market strategist will tell us what stock wills benefit from a bush or kerry victory. u.s. television networks have agreed not to report early exit polling results until the polls close in the states.the first polls close in about an hour in u.n. inn and kentucky. in two hour, it will rap up in florida. another key state, ohio, closing the polling booths at 8:00 a.m. hong kong and by 10:00 a.m. tokyo, voting finishes in 28 state. later on, polls closes a 10:00 hong kong. and a final state, alaska, closes at 1:00 p.m. hong kong and 2:00 p.m. tokyo. on wall street, the stocks dropped in last few minutes of trading. the dow erissed gain erased gains to close .2% lower. some exit polls suggest that john kerry is showing a strong effort to unseat president george bush. the nasdaq closed up .2%. it was earlier up as much as 1.2%. some strategists say a bush victory would be more promising for the stock market .

>> we’re looking for up 10% right now. in the next three to six months f president bush win. if senator kerry wins and there is grid lock, dips and comes back up and end up in positive territory. if senator kerry wins and the democrats control at least the senate, we think probably have a market struggling to be flat in the next three to six month.

>> speculation kerry may lead bush in key states pulled the dollar lower against the euro and yen. some say kerry will want a weaker dollar to boost the economy to create job. in the bond market , treasuries rise. speculation of gains for kerry boosted demand as stocks declined. in the oil market , crude dropped 1%, closing below $50 a barrel for the first time in four weeks. asian stocks traded in the u.s. as the bank declined. the a.d.r.’s alled a vanned. a swing in the online futures market puts john kerry ahead of president bush as the candidate trader believe will win the election. some websites have posted what they say exit polls showing kerry leads in the early voting like florida and ohio. kerry, who led bush by 18 percentage points in the iowa electronic market . it’s a not for profit betting system run by the university of iowa. intrade shows kerry leading bush by 16 percentage points. let’s get the latest from mike mckee in new york. we saw line of voters waiting to cast the ballot. what are the experts saying about the turnout?

>> they are saying, cathy, that we’re going to have a very strong vote in the united states. people have been following this election very closely. 90% say they are very interested in the election according to a recent poll. and so the candidates found themselves campaigning until the last moment, making their pitches.

>> today is a day of a new begin. it’s that magic moment when the greatest democracy on the face of the planet gets to show the world how we work.

>> i feel calm. i feel―i am confident that the people, in the judgment of the people.

>> george bush and john kerry who were casting their ballots earlier, we can probably guess for whom, but the vote of an estimated 110 million or more other americans won’t be known for several more hours. after two years of campaigning t voters are at the intersection of money and politics today. reports from around the country, long lines, voters coming out in what may be record number. analysts say turnout may reach 60% that would be the highest since 1968. and that may delay reporting this evening as may some expected legal challenges. polls going into the vote show the race a virtual dead heat. the top issue being the economy. mr. bush and mr. kerry have sharply diverging views on taxes, health care, and social security. and there’s also, as we mentioned, a possibility we may not know tonight who won. traders say having a clearcut winner from today’s presidential election is particularly important for stocks. however, we see americans head to the polls with the dow jones industrials 5.8% off the highs of the year, while the s&p 500 down 1.6% from the same day in february. stocks held back by concerns about record high oil prices, slowing consumer spending, and the pace of growth. in recent days, investors and traders pointing to uncertainty about the election and about whether we’ll have any legal challenge. cathy?

>> mike, how significant is kerry’s lead in the futures markets ?

>> not very significant at this point. going into today’s vote, it told you something about where people thought the election might turn out. but right now the people trading on those markets are reacting to the release of purported exit poll number on the internet on various sites. so it’s not really leading us. it’s just a reaction right now.

>> thanks for that, mike. u.s. stocks broke a six-day winning streak today after late election jitter. traders say investors were looking at that same information and very early and unofficial exit poll numbers that show strength in the numbers of senator john kerry. taking a look at the indexes t s&p 500 closed unchanged. the dow jones down .2%. nasdaq up .25%. julie hyman reports from the new york stock exchange.

>> stocks had been poised for the sixth straight gain in today’s session before we had a late day slide. now, in talking to investors throughout today’s session, they said it wasn’t so important who wins the election as that there was a clearcut outcome. that changed late in the day. we did have traders telling me there were reports on drudgereport.com that kerry was pulling ahead in early exit polling. with that, we saw the markets take a turn for the worse. the dow jones ending .32% lower if s&p 500 ended little changed. remember, this was after earlier, fairly substantial gains. volume fairly healthy. the busiest in a week after investors expected it to be a fairly quiet day. in terms of what investors are saying about the election, we had a analyst at bear stearns weighing in who said while elections will likely add to volatility in the coming week t choice of a president is unlikely to change the trend in the overall market . and he also pointed to the fact we are in a rising interest rate environment and that could weigh on stocks heading into the remainder of the year. something else we heard from u.b.s. and one of their strategists is earnings are more important than the election going into the end of the year and third quarter earnings are looking reasonably good, but it is dependent heavily on economic growth. this weighed on today’s session. finally, want to talk about drug stock. we did see them take a bigger than normal hit helped many part by merck. merck falling after the food and drug administration said the vioxx painkiller may have contributed to an estimated 28,000 heart attacks and deaths from 1999-2003. that combined with that late day kerry news contributing to the drop we saw. i’m julie hyman, bloomberg, at the new york stock exchange.

>> the u.s. federal reserve’s regional bankers are voting with their checkbooks for george w. bush and his republican party. advisors and directors gave $1.4 million to political action committees in the elections as of october 15. those who gave to one party favored republicans over democrats by a 2:1 margin. chairman alan greenspan and others avoid giving money to federal campaign, central bank policy allows lower ranking members to contribute to candidate. lots more to come on u.s. elections. after the break, the impact of the election day on the markets .

Interview: Sysco Corp---Schnieders, Richard---Chief Executive Officer
>> shares of sysco rallied today after the company said first-quarter profit rose over 8%.that’s sysco, the food distributor. north america’s largest food distributor is limiting the effects of higher gasoline, meat and dairy costs by automating distribution centers and cutting jobs. net income increased to 25 cents a share. sales rose 5.6%. that’s the smallest gain in over two years. for more on the company’s earnings and outlook, we bring in chief executive richard schneiders, standing by in houston, texas. thank you for joining us, sir. i’d like to start with your strategy. it has been something we’ve seen from a lot of companies, that they’re trying to increase efficiency and decrease the number of people they have to pay to get the job done. how have you gone about that? is this something you foresee continuing for sysco into the future?

>> michael, our strategy really is to continue to work with our customers to help them grow their business. those thousands of restaurants across the u.s. to understand better which customers are more important to sysco and allows us to be more strategic in the way we allocate resources. that’s a successful strategy for us and we’re getting closer to our customers.

>> what about capital spending% -and what you put out on your side of the company? are you going to be growing more, spending more? hopefully you’re growing more, but spending more to do so, or can you do it with your current resources?

>> from a capital standpoint, we continue to invest in our business. we invested just short of $100 million this quarter. we anticipate our capital expenditures this year will be between $400 and $450 million, which is on par for what we normally do. so no matter what the general economic environment is, we continue to invest in the industry.

>> speaking of the general economic environment, you certainly has to worry about commodity costs. what’s your outlook there for the coming quarter, into 2005? >> we hope to see a moderation. the fourth quarter of our last fiscal year ending in june, we had 8% inflation, which was historic highs. this year we―this first quarter of our year, we announced inflation of just over 5%. we’ve seen moderation in inflation and we anticipate it will moderate more. beef prices are still high and will remain high for a while because of the time to replace the herds but we’ll not see as high inflation as we’ve seen in the last few months.

>> what about energy prices, with your plants and your trucks distributing your goods?

>> in terms of our transportation, we have about 9,000 trucks on the road every day and our operating companies have done a great job routing and filling the trucks. our impact to the cost of fuel for us is fairly minimal. however, where fuel costs are having an impact is in terms of the discretionary spending for the consumer and their reluctance to eat out as often as they once would. as oil prices any down, we’ll see that activity pick up.

>> are your customers telling you they’re needing to order less because of the fuel effect?

>> we’re getting the same products from our customers, but they’re not ordering quite as many. where last year they might have ordered 10 cases of french fries, this year it’s eight cases of french fries. as things come back, sysco is well positioned for the future and as the economic environment improves, we’ll be positioned very well for the future.

>> you’ve been very acquisitive. are you looking to buy into 2005?

>> we have been an acquisitive company. over the 34-year history of the company, we’ve done just short of 100 acquisitions. i’m proud to say we’ve never had a writedown.we continue to look at acquisition opportunities in our core business and our specialty meat and produce companies. so absolutely, we continue to look for acquisitions.

>> is this a good market to do that? or is it better to wait until the economy firms up a little bit?

>> well, we think any time is a good time to talk with potential partners who might be interested in becoming part of the sysco family. right now is actually a pretty good time for us to have those discussions.

>> let me tie this together with something i asked you earlier about the economic climate. interest rates are fairly low but starting to go higher. did you want to move on anything or invest capital any time soon to take advantage of that?

>> well, as i said, in terms of our capital expenditure and acquisitions, it’s an ongoing process so we’d love to take more advantage of lower interest rates but we’ll have do the right thing at the right time and as i suggested, we’re working on a number of initiatives right now both internally and from an acquisition perspective, also.

>> thank you very much. sysco chief executive, richard schneiders. peoplesoft directors will meet to review the latest offer from oracle. $24 a share. is this the end of the fight for the company? is that story up next.

在线播报
Listen Market briefing --- Mike (medium)
NYSE --- Bob (fast)

welcome to “world financial report.” i’m michael mckee. with less than a day to go, polls show the presidential race in the united states is too close to call. while that’s happened before, one thing hasn’t, according to the man who does the gallup poll.
>> we have never had an election where our final gallup poll was an absolute dead heat. usually one candidate is one or two points ahead of the other. we’ve called it a statistical tie but when we did the final modeling last night, it came out 49 to 49.

>> the election may draw the largest turnout since the vietnam war. analysts say it is possible we won’t have a clear winner tomorrow. univest fund manager james fisher says the election is keeping investors from making any specific moves as they wait to see what happens.

>> on wednesday morning, stocks rise. it’s just the uncertainty of who the president will be will be removed and that’s positive for the stock market .

>> some who see a rally the day after are less optimistic in the longer term.

>> i think the markets are poised to try to trade higher here albeit in the context of an overall range-bound market . i don’t see anything that will knock us out of a trading range for a few years.

>> some economists say it doesn’t matter who wins the election.

>> the kerry plan starts with a bush plan, takes back some of the tax increases and more than spends it. in that sense, there’s not a huge difference between their approaches to the economy.

>> neither bush or kerry may have the weapons to jumpstart growth and stimulate the economy. the interest rate is already near a 40-year low and president bush has cut taxes $1.7 trillion, boosting government expenditures, as well. the record budget deficit makes further tax cuts and spending risky. some investors say they have picked individual stocks that will do well with president bush or senator kerry.

>> analysts say if president bush wins re-election, bet on the energy companies. nabors industries and el paso are among stocks that may rise if bush wins re-election because of bush’s push to increase exploration. as jeff quinlan says, “bush is good for energy.” and the anticipated move to keep the president’s tax cuts on dividends in place with increased demand for stocks with the largest payouts such as utility company duke energy. paul lieberman with bear stears says bush and kerry each have a state of setted policies that can be interpreted as either beneficial or detrimental to u.s. firms and industries. many analysts say energy stocks would fare differently under kerry than under bush.

>> oil and gas and energy services and equipment could experience unfavorable condition s for―under a kerry administration because of the willingness of a kerry administration to curb demand for oil either through gas taxes or something along those lines.

>> kerry says he favors looking for alternative energy resources so analysts look to other stocks where they expect gains if kerry wins. if kerry’s pledge to reduce tax cuts for the wealthy and reduce taxes on the middle class could bolster shares at retailers such as kohl’s. on the other hand, luxury merchants such as coach may be hurt. a kerry victory could also move stocks in the drug industry. kerry wants to cut prescription drug costs, which may be a boon to generic drugmakers. strategists at brokerage houses have all written notes to help gauge stocks.

>> today was a day of waiting with volume low and the major indexes all moving less than .3%. the dow jones industrials finishing 27 points higher, the s&p less than a point and the nasdaq up by five points. on the eve of this u.s. presidential election, trading activity, as we mentioned, light at the new york stock exchange. for more on that, here’s a report from bob bowden at the big board.

>> it was a light day of trading in the pre-election monday. volume at the new york stock%  exchange came in below 1.4 billion shares. here you see the last month of volume at the nyse. the low point is a columbus day holiday. in october, there were only five sessions below 1.4 billion and now we’ve started november, we have another one. another issue today, oil prices falling below $50 a barrel intraday before rebounding in electronic trading, finishing a little above $50 but oil investors are used to the all-time records in oil prices and anything otherwise is bearish for those stocks as you see on the list there, oil services, in particular, down between 1% and 2%. humana, the h.m.o., raising its quarterly forecast. humana shares, by rising 6.25%, made them the third best performing s&p 500 stock. the enthusiasm did not flow through to other h.m.o.’s on the day like united technologies, united health, wellpoint, coventry, down on the day, not anticipating the humana enthusiasm. one analyst said guidant may not appreciate because of speculation it may be bought and quarterly results may be an impediment on future stock price improvements. that stock down 5.5% on monday. other medical device makers took a hit, as well, including medtronic and boston scientific.

>> crude oil fell below $50 a barrel in new york for the first time since october 5 on speculation growth in demand will ease as supplies increase. we didn’t close under $50, however, finishing at $50.22 a barely for december oil. currently, crude oil trading down to $50.13, lower by $1.63. unleaded gasoline, heating oil and nasdaq futures all down. manufacturing expanded at the slowest pace in over a year in october in the u.s. fewer factories reporting production gains suggesting higher energy prices may be beginning to restrain growth. the institute for supply management’s factory index for last month dropped to 56.8 from 58.5 in september. economists say some of the slowing may be due to uncertainty.

>> i think you have to take into account the fact that most of the data we see is influenced by the fact that c.e.o.’s are not certain who will win the election. they’re not certain what energy prices will do in the coming months and if c.e.o.’s are uncertain, they’ll hold back on ordering things and employing more people and be more cautious in building inventory.

>> a government report suggests americans are dipping into savings at a time when energy bills are on the rise. consumer spending rebounding in september from a decline the previous month. the increase tripled the gain in incomes for the month. the commerce department says income growth slowed last month because of the hurricanes that hit the southeast. the savings rate falling to the second lowest ever. treasuries fell as the drop in crude prices suggested high energy costs may not damage economic growth as much as forecast. the 10-year note down about .3 at this hour, the yield up five basis points to 4.07%. on the middle of the curve, the belly of the curve, down about a quarter, yield of 3.33%. on the shorter end of the curve, down 1/16 with the yield at 2.59%. freshmen. release earnings once again. its first report due out in the second quarter of 2005. the mortgage financier has been cleaning up accounting and finagating―financial reporting. a change in interest rates eventually led to a $5 billion revision up in their bookkeeping. first-quarter profit at food distributor cisco rose over 8% even after paying for the surge in energy and food costs. we’ll talk to the c.e.o. coming up. sneaders

Asia-pacific region --- Gene

>> shares of columbia sportswear surged. until now, wall street was expecting 12% growth. chief executive timothy boyle predicts growth for next year.
>> we spend a lot of time collecting orders for spring season.%  we sell in advance of the season. one of the important things we talked about with investors yesterday on the conference call was our future backlogs for spring, which was up nicely. we’re expecting that the business will continue to grow and we’ve got challenges, as all businesses do. but we’re very excited about the opportunities for us.

>> in the third quarter, columbia’s earnings rose 8%. coming in at $1.68 a share. the dollar estimate from analysts was $1.64. to check on what’s likely to move markets in the asia asia-pacific region next week, we check with gene otani.

>> toyota may say profit rose 2.6% in the last quarter after asia’s largest carmaker sold more vehicles in the u.s. and europe. toyota is expanding factories overseas to meet demand for camries, sedans, and siena mini-vans. singapore telecom may say profit rose in the latest quarter after signing up more customers in australia. southeast asia’s largest phone company reports thursday. expect results from philippine long distance telecom. woori bank may also report thursday. korea’s largest lender probably returned to profitability in the third quarter after cutting risky loans. and k.t. corporation’s profit likely fell. the provider of high-speed internet access is suffering from sluggish demand for broadband and fixed line services. on the economic calendar, south korea’s export growth probably slowed as demand from the u.s., china and japan cooled. economists surveyed by bloomberg expect overseas sales rose 17% in october. south korea’s exports grew 23% in september. figures are due monday morning in seoul. south korea, taiwan and the philippines all report consumer price data this week. inflation likely accelerated in all three of those economies this month due due to record high oil prices.australia reports trade figures this monday and expect export figures from malaysia tuesday. that’s a look ahead in the new week in the asia-pacific region. back to you.

>> european stocks declined on the day but for october, all three benchmarks posted their first consecutive monthly gains since february. to get a preview of next week’s market action in europe, we’ll turn to mark barton in our london bureau. abn amro may say profit growth stalled in the third quarter as u.s. mortgage lending declined. the biggest dutch bank by assets probably rose less than 1%. in august, c.f.o. said that abn amro’s mortgage business would continue to stagnate in the second half. the bank has predicted profit at its north american unit to drop by 150 million euros to 250 million euros this year due to higher rates. a.b.n. is focusing on consumer banking businesses in the netherlands, u.s. and brazil. the dutch bank has sold almost three billion euros in assets this year and may use proceeds for purchases in the u.s. and asia. sticking with the netherlands and royal k.p.n. releases third-quarter results. the largest dutch phone company may say net income jumped 85% to 257 million euros. sales may slip 1.3% to 3.04 billion euros. k.p.n. has benefited from reduced expenses from job cuts and lower interest payments as the company reduces debt. in sweden, scannedy air reports earnings. analysts expect scania to say net income rose 25% to $130 million. sales may rise 6.9%. scania predicts growth to slow in europe’s commercial vehicle market as supply costs force truck makers to rise prices. the company has is that charging more for its vehicles and will do so again because of increased costs in raw materials. manufacturing surveys from u.k., germany and france, p.m.i., expected.

>> credit suisse first boston plans to cut costs by combining units and eliminating jobs according to those familiar with the matter. it’s the securities arm of switzerland’s biggest bank and the proposal may include dropping first boston from the u.s. subsidiary’s name. credit suisse has struggled with some of the highest costs on wall street. in july, the company replaced john mack with brady duggan after its share of the investment banking market slipped. during mr. mack’s tenure, 10,000 jobs were eliminated. on the day, credit suisse first boston down six cents on the session. after the break, fox networks reeled in for the world series. mike buteau will have the “money & sports” segment.

在线播报
Listen Market briefing --- Bob (medium)
Data --- Ellen (slow)
>> welcome back to “world financial report.” i’m bob bowden, recapping the day on wall street that was friday. a mixed market with the dow and s&p 500 up about .25%, the dow finishing at 10027, s&p at 1130 and the nasdaq at 1975. u.s. economic growth in the third quarter came in slower than expected as rising oil prices contributed to a record trade deficit and companies added less to inventories. ellen braitman spoke with dave malpass with bear stearns and asked him about the data.

>> the bloomberg consensus range went from 2.8 to 5.5. i don’t think we were in the top five of the forecasters looking for g.d.p. growth. so there’s quite a bit of uncertainty in the number. what we learned from today’s number that we didn’t have in our expectations was that the residential investment was particularly weak. also, inventories, the government says, actually declined in september. now, that latter point is good for then october and november. if you had low inventories at the end of september, that can help the growth rate going forward. so i think basically one thing i learned was the hurricane had a bigger negative impact at least in this first release of the g.d.p. number than what i’d been expecting.

>> give us a sense, i hear what you’re saying about business spending inventories expected to pick up in coming months, what about the consumer? what signs do you see from today’s report about what consumer spending will be like through the fourth quarter?

>> consumption growth was 4.6%. that’s a fast pace. i don’t know, i guess triple the pace of growth in the second quarter. i think that that is once again showing that the household balance sheets are in better shape than people think. and also that we’ve had quite a bit of job creation going on in the economy. so i expect the consumer to remain resilient going forward. people look at that savings rate and say it’s very low. it’s an incorrect or misleading measure of what people are actually saving. i see the household balance sheet in pretty good shape and greenspan said that last week.

>> let’s talk about the impact on consumers from oil and i want to talk about it through the prism on the bond market . is the bond market correctly interpreting the implications of the surge in oil?

>> i don’t think that’s what the bond market is telling us in terms of the outlook. the bond market is saying that the fed funds rate is at 1.75% so this is a sharp upslope yield curve, very profit inel and that drags down the yield. i don’t think it has to do with the economic or inflation outlook.

>> what is the inflation outlook from your perspective. a report today said inflation is not a problem.

>> the g.d.p. inflater was low but it wasn’t a good indication of inflation in 1999 and 2000 as we headed into it. i don’t think that’s a very good measure. my expectation is that core c.p.i. will rise over the next year and a half by as much as a percent and a half so we’ll get up towards 3% before we’re done with this inflation bulge. the reason for the bulge is the dollar was weak in 2003 into the first part of 2004 and that pushes prices up.

>> david, what do you expect for fourth-quarter economic growth?

>> we’re looking at 4.6%. again, that’s a range, you know, so could it be 3.5? yes. could it be 5.5? yes. some of the factors strengthening it, remember, we have huge liquidity in corporate and household sectors and the hurricane rebuilding is additive to fourth-quarter g.d.p.

>> that’s david malpass, chief economist with bear stearns. companies are less upbeat on the economy now than they were three months ago according to the latest survey by the national association for business economics. only 15% of companies are somewhat more optimistic about growth in the second half of 2004, down from 41% in the july survey. the surge in oil prices may erode economic growth this year, according to some economists. federal reserve board vice chairman roger furgeson says interest rates can continue to rise at a gradual pace and cites the lingering hessitancy among businesses, the drag on domestic producers from imports and restraints on spending caused by higher energy costs. mr. ferguson is a permanent vote ing member of the federal open market committee. all 46 economists surveyed by bloomberg expect the rate to rise another .25%. the 10-year note gained 6/32, yield heading back down towards 4%. the yield was below 4% as recently as monday of this week, now 4.02% -copper prices soared a day after the chinese government hiked its interest rate and convinced commodity traders the demand may slow from copper. today, we have falling inventory figures from asia, suggesting that chinese demand may still be robust after all.global stockpiles fell to a 14-month low including declines at warehouses in singapore and new orleans. phelps dodge, largest u.s. producer of copper, said china’s copper use will probably increase 12% to 15% this year and prices have gained 46% in the past year. when we return, columbia sports sports wear raised its forecasts and shares jumped. that story is coming up.

Interview: Encana
>> welcome back. encana is selling its business in the united kingdom for $2.1 billion and plans to sell businesses in ecuador and the gulf of mexico next year to focus on its north american natural gas and oil be projects. to talk about the deal, the chief executive joins me. you are the largest natural gas producer in north america. wanted to begin on this deal. why are you selling these assets to redistribute elsewhere? that’s the driving force?

>> when we look at the history of our company, we really have built ourselves on what we call north american resource place, unconventional resources of gas and oil and we find we have a tremendously strong portfolio to grow the business on and our international operations became expendable and we felt this was a good time to sell them.

>> is that because the price of oil is so high?

>> certainly the international asset market is very strong and these are all oil assets we’re talking about.

>> how much do you expect to get from the sale? all the sales?

>> we got―we haven’t said what that number is. but these are considerably -- these are large assets so there’s―we’re probably about halfway there.

>> ok. now, will you be repurgating some of your own stock with the proceeds from these sales? what you’re putting in the neighborhood of $2.1 billion. >> what we said was that we’ll balance the use of proceeds about equally between the purchase of shares, repurchase of shares and paying down debt. we’ll do that with the $2.1 billion we’re getting in now and the money from the balance of the large assets sales. >> i want to turn attention to the bloomberg terminal. you know the chart of natural gas prices. we’ve talked about oil but this is a six-month chart of natural gas and what we show is we’re now at―i don’t know how far back you have to go―we’re now at $8.72 per million b.t.u. this is a skyrocketing price, we were at $4.50 in mid september and prices have close to doubled for natural gas in two month. what is driving this?

>> there are a number of things driving it. one of the big catalysts was the hurricane itself, hurricane ivan. we were working along towards reasonably the price was $4.50 and there was concern about reaching full storage in north america before the end of the storage season if you like, in other words, before winter. hurricane ivan changed that quite a lot and pulled production offline so now we’re going into winter and we have winter weather prospects in the future and i guess people forecast that for those of you that live in the northeastern united states, it might be pretty cold and that’s built into the futures price.

>> you trimmed your 2005 capital spending. will that impact your ability to drill wells next year, especially with the really high natural gas prices, with a four-year high right now?

>> it will mean we drill a few less wells. we’re trimming really keeping our capital budget almost the same but having to absorb a higher increase in service costs and supply costs including, of course, the price of steel. so we’re having to absorb that within our program. that means a few less wells. we drill more wells than any other company in north america, about 5,000 a year, in fact, so we might cut that back by 5% or 10% but we’ll still build a lot of wells and bringing on new gas production. we expect our natural gas production to grow about 15% to 16% this year and the same next year and that’s a huge growth in north american natural gas.

>> just to return to the chart for a second. when you have the price of natural gas almost double in six weeks, i just want your sense, is part of this a bubble? is this a reaction to what’s happened in the crude oil market and it’s really supply and demand not justifying the expensive level of natural gas?

>> there is an interrelation between natural gas and oil prices. actually, for quite a while, we had the disconnect in the other direction. most people can think of it simply, a little oversimplified but you can use the analysis, there’s about a six to one relationship between the energy value of gas and oil so if gas is at $8, that would imply about $48 oil so you can see the correlation there. however, having said that, there’s also a question of north american supply and demand that really also sets gas prices. sometimes it can disconnect from the lower side and sometimes overshoot on the upside.

>> has it overshot on the upside right now?

>> it has overshot on the upside on a b.t.u. equivalent basis temporarily with summer reduction of oil prices. the bottom line here is that the market sets the price based upon expectations and demand over the coming season and the actual overriding factor is that natural gas production in north america seems to have peaked. despite all the drilling going on, with the exception of a very few companies like encana, production is flat or down. so north america seems to have a problem, a supply-demand imbalance.

>> our thanks to gwyn morgan, encana c.e.o.

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Listen Market briefing --- Bob (medium)
NYSE --- Julie (slow)
Nasdaq --- June (slow)

welcome to the friday edition of “world financial report.” i’m bob bowden. the investigation into the insurance industry is widening. california’s attorney general says his state will now investigate insurance brokers and the cuchs they work for following an investigation underway in new york. last week, california’s insurance commissioner called secret commissions paid to brokers a serious problem that betrays the public trust. john garamendi said that brokerages will face fines and could loose their insurance licenses. gross domestic product grew at a 3.7% growth in the third quarter. economists predicted growth of 4.3%. consumer spending rose at a 4.6% pace, the fastest in a year. business investment also grew and a measure of inflation fell to a four-decade low. the report is among the last before next week’s presidential election. both parties reacted to the data. white house economist stephen friedman welcomes the acceleration of growth in the third quarter.
>> it is confirmation that the economy came out of what the federal reserve called a soft patch in the second quarter and it was really quite impressive given some substantial headwinds. oil prices, indeterminant impact of hurricanes, slower growth than we wanted from overseas trading partners so it’s a tribute to the resilience of the american company.

>> robert reich, kerry adviser and former labor secretary says today’s report is further evidence workers are struggling with falling wages and healthcare soaring healthcare costs.

>> more than 800,000 jobs have been lost under the watch of this administration so in terms of what consumers are concerned about, jobs, wages, healthcare, this economy is still in very, very poor shape.

>> most voter polls rank the economy as the top issue in this year’s election. one regional survey of the manager’s activity rose to the highest level in more than six years. consumer confidence fell with record oil prices, slower job growth and uncertainty about the presidential election taking a toll on the consumer for october. the benchmark 10-year note rose on the day. you see there 7/32 on the day. the g.d.p. data showing inflation rose at the slowest pace in more than 40 years, driving up the 10-year there. the shorter end of the curve with the two-year treasury up 1/32. investors focused on the chicago-area readings and the consumer confidence number. a mixed market on friday with the dow jones industrial average up .23% as was the s&p 500. the dow finished at 10,027, s&p at 1130. the nasdaq virtually unchanged on the day at 1975. energy and material stocks led gains while household products declined. for more on the day’s trading action, we have a report from julie hyman at the new york stock exchange.

>> a choppy session for both the dow and the s&p, really a lot of elements pulling the market in both directions. because of that, we saw a lot of up and down. we came up in the last hour or so in frauding but on lower-than-average volume so both the dow and s&p finishing with a gain of about .2%. if you look at the elements causing the lack of activity in the markets , the upcoming election is a big factor on tuesday. a lot of folks don’t want to place big bets ahead of that. economic reports were relatively mixed and because of that, people not knowing what direction to take on the economy and oil gaining by the end of the session pressuring stocks although oil was unchanged most of the session. in terms of what we saw gaining in the session, oil stocks did well with the energy index gaining 1.4%. we saw chevrontexaco gaining after it came out with earnings up 62% in the third quarter. anadarko petroleum, on the other hand, lowered the top end of its sales forecast for the year and it was one of the decliners within the group. we saw materials stocks doing well, rebounding after yesterdayee declines when the chinese raised their interest rates. so some of the big advancers today were decliners yesterday. stocks like allegheny technologies, nucor, freeport-mcmoran and phelps dodge. one weak group was household products makers because of avon coming out with earnings that rose. they also raised their forecast for the year. however, their sales declined for the first time in five years sales were particularry weak in the u.s., their largest market . i’m julie hyman, bloomberg news, at the new york stock exchange.

>> the nasdaq ended the week up 3.be 1% for its best gain in four weeks. june grasso has details on nasdaq trading from the nasdaq marketsite in times square, new york.

>> insurance stocks were the worst performing group at the nasdaq today led down by u.s.i. holdings, distributor of insurance services said in a statement it may receive a subpoena from the new york attorney general as part of an industry-wide investigation relating to the pricing and placement of insurance. smantex, world’s largest maker of anti-virus software, led the nasdaq lower following its competitor mcafee’s report that said last quarter’s sales of a product that prevents network attacks more than doubled while its consumer products jumped 90% and after a.o.l. announced it would give away the mcafee anti-virus software free. symantec was cut to hold at deutsche bank. telecommunication stocks were the best performing group at the nasdaq led by@road, provider of a service that allows companies to trace employees via the internet. looking at chinese internet stocks, which generally tradeed lower today, sohu.com, one of the most active stocks on the nasdaq and leading decliners by percentage is one of dhin’s three largest internet companies and forecast fourth-quarter sales would be as much as $24.4 million compared to estimates by thomson financial of $27.3 million. third-quarter earnings per share were 21 cents, lagging analysts’ estimates. it led down the other chinese internet stocks. i’m june grasso, bloomberg news, at the nasdaq marketsite in times square.

>> we’ve been talking about oil prices lately. crude oil futures finished the day higher after losing 8% in the past two sessions. in new york trading, futures rallied on concern nigeria’s production could be hurt by labor disputes. su keenan tells me more than half the traders and analysts see prices falling next week.

>> big shift in sentiment, bob. a week ago,65% of those surveyed were bullish and now almost the same amount of traders have turned bearish. the main concern, that china’s first interest rate rise in nine years will slow demand growth amid rising u.s. inventories. the survey shows 62% expect crude prices to continue declining. 17 expect prices to rise and only three say oil will be little changed. fimat’s michael fitzpatrick says barring a major supply disruption, oil could trade close to $40 a barrel by year’s end.

>> all things being equal as they are right now, prices should move lower, especially with china slowing down a little bit, evidence that the e.u. economy is beginning to contract certainly evidence here our economy is contracting.

>> fimat predicts prices will continue to drop next month as heating oil supply concerns ease. crude oil supplies are the highest in eight weeks and heating oil futures have dropped in the past eight sessions. prudential’s richard rippe predicts $40-a-barrel oil in the months ahead.

>> when you go from $30 oil to $55 oil, that $20-plus hike represents a significant drag on the economy and the best possible news we could get in coming months would be if oil prices began to recede back into the $35 to $40 zone.

>> the oil rally so far was the best possible news for chevrontexaco, its profit up 62% for the third quarter. net income rose to $3.2 billion or $1.51 a share compared to $1.9 billion or $1.01 a share.

>> when we return, canadian energy company, encan asold its british business for $2 billion. we’ll speak with the company’s c.e.o. coming up.

Interview: Qualcomm
>> qualcomm has been on a roll.% -over the past year, the stock has soared about 80%, far outpacing the broader market . today, i spoke with qualcomm chief executive irwin jacobs about his outlook.

>> i can’t update until we have our financial reports but as was noted at that time, we are having supply problems. we are catching up with them but it probably will extend throughout the end of the year. cdma has been growing well worldwide and a lot of phones are bought and we’re working hard to keep up with manufacturers’ requirements.

>> can you give us an idea about how you’ll keep up with demand, what steps you’re taking to meet demand?

>> a couple of things. first of all, we have upgraded the chips to our next generation chips and in that case we get actually more chips on a wafer, somewhat technical discussion, but it gives us a better supply of the chips. and the manufacturers then had to upgrade their phones to be able to make use of the newer chips so that’s already been happening. there are still shortages on the radio frequency part of the phones and we’ve been working with the various suppliers to increase those. so we look at different ways. the market clearly is up. i think cellular will continue to grow for quite a time to come. so we’re working with the various suppliers on a longer-term basis to make sure their supply can match our needs.

>> and you find yourself today in brazil. give us a sense of how fast you expect to grow in latin america and what you hear down there. what’s needed?

>> brazil has been a very good market for us, growing faster than we’ve expected in the past. the reason i’m down there was a conference called future com, and i was here with the largest cellular provider in brazil and they use cdma equipment and they were introducing several new services based on our latest technology. they were using the global positioning system, g.p.s. one technology to provide a whole range of new location-based services and our latest higher data rate service to 1-x dvo technology, and introducing that along with video downloads and audio downloads.

>> there are suggestions you can boost your share of the market to 60% of the global wireless handset market by twine. how―by 2009. how realistic is that projection?

>> the cdma is broadening with wcdma so we’re seeing that expand in europe and elsewhere in asia. the market is growing, there are clearly new suppliers because of the new technologies entering the market so we have to fight for our share but we have a good basis because we know cdma so well and because we’ve been delivering third generation chip sets for phones as far as two years ago, that gives us the advantage of adding the additional capabilities you need beyond communication―as i mentioned, position location, video decoding, decoding, audio coding, decoding, the ability to take pictures, a whole range of capabilities on our chips.

>> on the other side of things, there are those out there that are more cautious on your stock. the morgan stanley analyst said your earnings growth may slow next year as operating expenses rise and consumers replace handsets more slowly than they have been. what’s your reaction to that?

>> well, we’ll have to wait and see, obviously. what we have been seeing to date is a very good replacement market because of the new technologies coming in. i have not yet seen any slowing down in that replacement. since we’re also going to wcdma, there’s a new set of markets opening. we are affected by the world decline and we’ll see how that moves ahead but as far as technology and consumer acceptance of technology, that has been very strong.

>> other investors point to your balance sheet and say you have $5.5 billion in cash, no debt and you’re free to pursue whatever you’d like. what will you do with that money to generate returns for investors?

>> of course, we introduceed dividends a year ago. we’ve increased those twice since the initial introduction. we continue to look at stock buybacks when that’s appropriate. we are also, of course, always looking for other ways to invest our money but we certainly have a very good availability of cash so it doesn’t limit our strategic alternatives. our main objective is increasing shareholder value.

>> do you have a sense of whether you would enter a share buyback program any time soon?

>> we have a share buyback program in place and occasionally we go into the market to buy shares.

>> irwin jacobs, c.e.o. of qualcomm. those shares up again today, better by 3.8% at $1.52, at $41.02. michael ovitz says he was “pushed out the sixth floor window” by michael eisner and other managers. we’ll have the latest on that trial coming up.

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Listen Market briefing --- Lane (medium)
NYSE --- Julie (slow)
Marsh & Mclennan --- Bob (fast)
welcome to “world financial report.” i’m lane bajardi. we start off with crude oil, which plunged nearly 5%, the biggest decline in four month after an energy department report showed inventories rose more than expected. supplies climbed by nearly four million barrels. still, distillate fuel including heating oil and diesel declined more than expected last week. crude oil at the close on the move lower by nearly 5%, $2.71 at $52.46. gasoline down 5.5%, heating oil down 4.63% and natural gas futures down 6.28%. some analysts believe prices will decline further.

>> i think everybody is continuing to underestimate the damage that high crude oil prices will do to our economy and more industrialized economies particularly in asia. they’re built on doing things on the cheap, whether labor and raw materials and they’re hammered on the raw materials front and to the extent the energy prices work their way into those systems, you’ll see the demand contract.

>> opec’s president says the u.s. should tap the strategic petroleum reserve to lower prices. falling oil prices helped create the biggest rally in two months for the dow and s&p. the industrial average above 10,000 by two points, up 113 on the day. the s&p better by 14 at 1125 and the nasdaq checking in at 1969, up 41 points. the dow crossed above the 10-k level as the index rallied for the second day. for more, we have a report from julie hyman at the new york stock exchange.

>> the dow had its biggest two-day rally in a year in today’s session and closed above the 10,000 level for the first time since october 14, the day before new york attorney general eliot spitzer announced his investigation of the insurance industry which set off a decline in those stocks and in the market generally. it looks like we are returning from those levels. in terms of what gained today, a broad based rally because of the declining price of oil. semiconductors and technology generally did well. pharmaceuticals, healthcare equipment as well as auto stocks did well. oil having a good effect, specifically on the technology stocks as they are seen as economically sensitive. this was not good for energy stocks, energy stocks declining in the session. the energy group declining the most within the s&p 500. some of the stocks that declined the most within that included amerada hess. that company released earnings and said third-quarter net income was up 22%, but that did miss analysts’ estimates. we had a couple of highs for various groups in the session. the s&p 500 retail index closing at a record high today. we also had the dow transportation index doing well as it had been for the past couple of months. today, it once again closed at a five-year high. today, we had company specific news from cardinal health, that stock gaining after the company reported finally their fourth-quarter results after they restated their year earlier results and there was optimism about that. that’s back up 20%. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> j.c. penney has named myronole ollman as the company’s new chief executive. ullman will replace allen questrom as new c.e.o. shares of j.c. penney down 3% on the announcement. biogen idec reported third-quarter profit of $36.8 million, a dime per share net. excludeing items, it was two cents better than estimates. sales rose on demand for the avonex multiple sclerosis drug and rituxan cancer medicine. it awaits approval of the new multiple sclerosis drug called antegren. that medicine is expected to be profitable. shares of j.d.s. uniphase falling sharply after they said sales in december may fall as much as 8% from the quarter that just ended. analysts expected an increase in that number. j.d.s. uniphase lost two cents i share in its fiscal first quarter which ended in september in u.s. economic news, september durable goods orders rose for the third time in four months. the commerce department says the gain was driven by military equipment and computers but the increase was less than half what most economists expected. in august, the decline turned out to be twice as bad as originally reported. excluding aircraft and other transportation equipment, orders rose for a third month in a row and the gain was six times what was forecast in a bloomberg survey. the housing market is also stronger than expected. sales of new homes rose to the third highest total on record as low mortgage rates encouraged americans to buy houses. the median selling price dropped 8.4% to just under $198,000. higher energy costs constrained economic growth in september and early october according to the federal reserve’s beige book regional survey that says consumers and businesses reined in spending because of the higher energy costs and higher prices boosted prices for some goods and services as manufacturers tried to pass on cost increases to customers. still, retail inflation is “largely subdued.” looking now as energy prices tumbled, the bond market did, as well, treasury notes falling the most in eight weeks as concern is easing about slowing economic growth worked its way into the market and demand of the government’s monthly sale of two-year notes was the weakest since january. there’s continued fallout from the bid rigging scandal in in the insurance industry. bob bowden has been falling the story and joins me with more.

>> thank you. the latest in new york attorney general eliot spitzer’s insurance investigation, ace, a property and casualty insurer, admitted wrongdoing about two weeks ago. spitzer had named ace as one of the companies that colluded with marsh & mclennan to provide fake quotes to customers. in a conference call today, ace chief executive evan greenberg acknowledged that improper conduct took place in one unit of his company. he said one employee had pleaded guilty to a criminal misdemeanor in connection with bid-rigging activities. evan greenberg is the brother of jeffrey greenberg who resigned as c.e.o. of marsh & mclennan. ice investors were―ace investors were digesting the earnings news reported yesterday call calls for hurricane claims produced a net loss for the company. ace shares, which fell more than 9% on the day the spitzer investigation was announced, today fell .2%. maryland insurance commissioner says he will investigate more wrongdoing.

>> we will go back up the food chain to look at the activities that took place that led to the purchase of the insurance and any inappropriate, illegal activity will be dealt with swiftly.

>> while ace was alleged to be colluding with marsh & mclennan, chubb was not mentioned in the probe. chubb vice president said in a conference call today that his company has found no evidence of participation by chubb underwriters in the types of activities alleged against other companies. chubb reported operating earnings that beat estimates. chubb shares gained .7% on the day, wednesday, and checking shares of other insurance companies mentioned in the spitzer report, a.i.g., run by hank greenberg, father of jeff and evan, lost .5% on the day while hartford shares gained .5%.

>> dow chemical is expected to post a 76% surge in quarterly profit tomorrow. analysts surveyed believe the nation’s biggest chemical maker earned $583 million. after two years of cutting prices, chemical makers have been boosting prices charged for chemicals used in plastics, paints and textiles. but now, with world economies growing, analysts say a recovery cycle is underway. chemical companies are running plants at close to capacity to meet rising demand, especially from china. shares of qualcomm have gained over 50% this year. we’ll hear from the chief executive about his strategy for continuing growth.

Interview: Cingular Wireless---de la Vega, Rafael---Chief Operating Officer
>> cingular wireless is now the nation’s largest mobile phone company. the company has closed on its purchase of at&t wireless for $41 billion in cash. now cingular must find a way to keep its 46 million customers as it combines operations even as rivals including verizon try to lure them away. to talk about the strategy, we welcome chief operating officer, rafael de la vega, coming to us from atlanta, georgia. welcome.

>> it’s great to be here.

>> let me ask you about the combination. when you put the companies together, the government required divestitures. what is the first thing you’ll do and how long will that take until it’s taken care of?

>> we have 120 days to divest of those properties and we will work with a trustee to make sure the properties are managed in such a way to to maximize the value of the assets so we’ll be diligent in looking after the properties to make sure they’re managed well and turned over as soon as possible.

>> how many stores do you have to close and customers do you have to give up?

>> 300 to 350,000 customers and i don’t have the exact number of stores but a small number of stores itch i presume at some point you can go back after those customers?

>> for the time being, we are not permitted to go after them but in the future our customers will have a choice. today, customers have a great choice with local number portability and they’re free to choose their provider.

>> local number portability had growing pains with people complaining when it first went into operation. as you merge the two companies, do you see problems?

>> no. i think those processes are more mature and are working better and i think the customers are still going to get great service.

>> you have two different systems operating―the g.s.m. system and the system that had been used in the united states co-division. how do you merge those two? which one comes out on top and which strategy do you pursue?% -

>> great thing about the combination is that both at&t wireless and cingular wireless use g.s.m., the most commonly used international standard for wireless. so we’ll be able to sell g.s.m. technology, beginning in about 30 days, exclusively what we will sell.we’ll make sure our customers have a great experience and the benefit of using that technology, it is so widely used in the world, they’ll be able to use their phones just about anywhere they go internationally and get great coverage. in fact, cingular wireless, the new cingular, will have the largest global coverage of any provider in the u.s. now that we have merged.

>> i know that you’re enthusiastic about your ability to manage the combination but companies usually run into hitches as they merge operations and this is a time when the competition moves in. how do you fend off verizon and t-mobile and others as you try to make this happen smoothly?

>> first of all, we give customers a great value and i think the new cingular will give customers exceptional value. they’ll have coverage in 49 out of the 50 states, in all the nation’s top 100 markets and access to the nation’s largest digital voice and data network in america. they’ll have access to the largest mobile-to-mobile calling community in america and great global coverage. in addition, we know as the mergers come together, there are some things that sometimes we need to have extra care and we’re going to talk to our employees to make sure they give our customers exceptional handling in the next 30 to 90 days until we get the merger well behind us and we can begin to provide common services across all the stores and platforms in our company.

>> let me ask you this from a customer’s perspective, you’re talking about the advantages of your company. the others will talk about the advantages of their companies. how do you break through that and convince people that cellular service is not just a commodity, that one’s pretty much the same as the other?

>> i think one of the things that we’re going to be able to offer our customers is we’ll differentiate ourselves in quality, coverage, innovative and creative new services. today, with the beginning of putting these companies together, the customers are immediately going to begin getting better coverage. so that promise is coming to fruition quickly. in addition to that, when you combine networks of both companies, they’re going to see better quality. and then finally with the spectrum and assets we’ll be able to put together, customers will see differentiated services that are exclusive to cingular, that are easy to buy, easy to use, that will make their lives easier so we’ll put a great deal of emphasis on making things simple for the customer to buy, use and simplify their lives and i think that’s what’s bringing value to the customers.

>> anything extra we’ll see in the earnings reports in terms of charges for the merger or layoffs to rationalize operations?

>> we previously announced expected charges as a result of putting the companies together, launching advertising plans and beginning the combination and i think those estimates have not changed from what we have previously determined and as we get into the end of the year, we’ll be able to reassess whether those initial savings estimates are valid and right now this is the first day and we’re pleased to have the merger complete and on its way.

>> thank you very much, rafael de la vega, chief operating officer of cingular wireless. for the first time, hedge fund managers will have to register with the securities and exchange commission.%  that story coming up next.

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Listen Market briefing --- Mike (medium)
Marsh & Mclennan --- Su (fast)
NYSE --- Julie (slow)
welcome to “world financial report.” i’m michael mckee. for the latest on the change in leadership and business practices at marsh & mclennan, the insurance broker accused of taking kickbacks and rigging bids, the rebound in the stock led an industrywide rally as marsh’s new chief executive created a compliance unit to oversee its business. su keenan has more on the changes which come less than two weeks after new york attorney general eliot spitzer sued the company. su?

>> mike, with these latest moves, replacing the c.e.o., establishing a compliance unit and banning 52 fee―fees that suggest a conflict of interest, marsh & mclennan is avoiding criminal indictment by eliot spitzer. new chief executive, michael cherkasky, says he’s committed to a quick settlement of the investigation and spoke with spitzer today. cherkasky said bid rig suggest limited in his review so far and that a narrow client group was hurt by the practice. he says the company will negotiate restitution. he says the move to ban commissions could cut profit by more than a quarter next year, but expects to remain competitive as rivals do the same. as part of the civil suit, new york attorney general eliot% -spitzer refused to negotiate with former c.e.o. jeff greenberg. greenberg stepped down yesterday after running the world’s largest insurance brokerage for five years. cherkasky replaces him as a relatively new insider. he was the former head of kroll, the security firm marsh bought in july. cherkasky has a prior working relationship with spitzer, serving as his boss when both were manhattan prosecutors over a decade ago. now that glenberg is out, spitzer says marsh can move forward towards resolution of the lawsuit and he will not pursue criminal charges against the company itself help john bogle predicts major changes ahead for insurance brokers.

>> someone doing a lot more business with you, you can treat them better than someone else. i see nothing particularly the matter with that. when you get into bid-rigging and companies asked to deliberately put in high bids to make the low bidder look like the low bidder and have the low bidder subsidizing that bid, that’s not good, that’s not traditional. i think we’ve run over the bounds of ethical behavior here. >> bogle says it has taken the mutual fund industry a year to recover what he calls from the cloud of spitzer’s investigation into improper trading in the mutual fund industry. back to you.

>> su keenan. we’ll hear from michael cherkasky about his plans for moving the company forward later on in the program. it wasn’t just marsh. insurance companies across the board led stocks higher today. the dow jones industrials finishing up almost 139 points, the biggest gain for the dow in four months, since june 7. the s&p 500 up by 16 points and the nasdaq rising by 15. looking at volume on the new york stock exchange -- for more on today’s trading action, here’s a report from julie hyman at the big board.

>> the dow jones industrials had their biggest gain today since june 7, recuperating―more than recuperating, losses from the prior two sessions. the dow broke through intraday lows on both friday and on monday so folks telling me today it was coming back from oversold levels. the s&p 500 also coming back in the session though not as much as the dow, up 1.5%, only the biggest gain this month thus far. insurers accounting for much of the gain today. marsh & mclennan rebounding after it replaced its c.e.o., jeffrey greenberg, with michael cherkasky and said it was creating a new compliance unit. the s&p 500 insurance index, the biggest gainer within the s&p 500. some of the biggest gainers within that index included a.i.g., o’on and ace and hartford financial. health insurers doing well today not just because of the rebounds generally in the group but also because of wellpoint health which released third-quarter profit beating analysts’ estimates and raising their full-year profit forecast. looking at utility stocks, the s&p 500 utilities index closing at its highest since may of 2002 and many components of the index reaching record highs in today’s session. this is the only group, by the way, that has risen five straight sessions. many of the other s&p 500 groups had been mixed. these, again, stocks, touched all-time highs today although as you can see, t.x.u. did not close at that level. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> two major insurance companies are reporting higher earnings for the september quarter. they released results after the close of regular trading. chubb had third-quarter earnings rising 40%, coming in at $1.88 a share. chubb saw an increase in premiums and investment income. excluding gains and losses, chubb earned $1.72 a share, 11 cents more than the average analysts’ estimates. chubb’s the nation’s second largest insurer of corporate executives and directors. at aflac, third-quarter earnings rose 27 percent. sales in the u.s. and japan missed targets, forcing the company to lower its forecast. chief executive daniel amos says he’s “disappointed.” japan is aflac’s biggest market . the company earned 58 cents a share in the third quarter. crude oil futures rose on speculation u.s. inventories of heating oil, diesel and gasoline will continue to fall as demand exceeds refinery output. supplies of distillate fuels likely fell a million barrels last week according to the median estimate of analysts polled by bloomberg news. checking oil prices, oil finishing up on the day, $55.17, tying the record set last friday for the all-time high, that is december crude futures there. morgan stanley’s chief global economist, stephen roach, who has seen the possibility of resegfor some time, continues to say high energy costs are dangerous for the economy.

>> in my view, if we spend three months where the oil price averages $50 a barrel or higher, that will qualify as a full-blown oil shock and for an unbalanced, vulnerable global economy, that’s a lethal combination and could bring recession next year.

>> reacting to the move up in crude, gasoline, heating oil and natural gas all higher on the day. consumer confidence, though, lower. falling in october for the third straight month, suggesting growing voter discontent with the economy a week before the presidential election. the conference board’s index dropped to 92.8, the lowest since march. the main reason, concern over jobs and income.

>> business conditions were down and people were a little discouraged about their incomes. but they would see increases. so it was across the board but always the key is that employment picture. people are nervous about that employment situation.

>> higher energy prices are also weighing on consumers, according to smith. the gain of optimism about the next six months plunged to 92 from 97.7 in september. since the survey began in 1967, no president but ronald reagan has won re-election with the confidence index below 100 as voters go to the polls. three incumbents have lost when readings were below 90. when president bush took office, the index was almost 116. treasuries largely brushed off the confident report, moving a bit in reaction to stocks and the government auction of inflation protected securities. the 10-year note on the day was down a quarter, yield up two basis points, almost three, to 4%. at&t will pay $100 million to settle a lawsuit by shareholders. the class-action suit is seeking $2.4 billion in damages, accusing at&t of lying about its finances. shares rose on the day 20 cents. at&t wireless wireless, meanwhile, is no more. and cingular wireless is now the nation’s largest mobile phone company. we’ll speak with the chief operating officer, rafael de la vega, next.

Interview: The steel industry
>> the results company will be known as mittal steel. earlier, erin burnett spoke with the two deal makers, lakshmi mittal, chairman and c.e.o. of ispat, and wilbur ross, chairman of international steel.

>> i have been propagating that the steel industry should be consolidated for the last many years and we started the process way back in 1994. we grew up as a smaller company, about five million tons and started looking at different opportunities for consolidation of the steel industry. this is our story. today what you see, l.n.m. group and ispat international, have business in more than 14 countries and one 50,000 employees, grouped together. what we have done, as you have said, ispat international acquired l.n.m., so this becomes second largeest steel group. and then we needed to look for further opportunities for growth, consolidation and globalization. today, we are the most global group in the world. we needed to look at opportunities in the u.s.a. we have a company called ispat inland in chicago, a smaller company. if you look at the steel industry in the u.s., there has been few consolidation, few mergers and acquisitions in the steel industry. i.s.g., under wilbur ross, has been the leader and pioneer in the company, acquiring five companies in the last 2 1/2 years and has become the largest steel company in the united states.

>> wilbur, why did you choose, when it deal came along, why did you choose do it now, the 40’s% premium nothing to be upset about, certainly, but why did you feel you needed to sell it to somebody overseas?

>> we’ve always had international in our name and always intended, as i’ve discussed with you before, to be international. so for us, the decision was to do individual deals, take five or 10 years, and hope to create something like what mr. mittal has already, or do one big transaction, make a global map right away. so he and i met august 24 for the first time although i had known of what he was doing and admired it and we got along very, very well.

>> so august 24 was the first you had conceived of it?

>> i had been admiring what wilbur has been doing in the u.s., as i’ve been sitting in london, and i really wanted to meet him and understand what is his vision and what he wants to do in the steel industry. and then we met, carry on, wilbur.

>> as it turns out―he’s my new boss, i have to do what he says.

>> you have to remember where your bread is buttered.

>> we found we both like the need for efficiency, the need for globalization, the need for investment quality capital structure, all the key things and we’re both entrepreneurial companies. many of the big steel companies are bureaucratic businesses and these were not so we felt there wouldn’t be a culture clash by putting them together and it’s gone very smoothly.

>> 40% in europe, 30% in the u.s. and 30% from south africa, kazakstan, algeria. asia is a big hold here. is that the next area of acquisition for you?

>> a couple of months back we announced a small acquisition in china. we decided to make a beginning. we have announced a small downstream project and we are constantly looking at opportunities to invest in china. as the largest global steel company we cannot be truly global without a footprint in china so we will lock at the opportunities in china. we will also look at opportunities in india, which is also coming out as a very strong growth market . these are the opportunities which we think we will look at in the future.

>> we’re very active in asia. i’ve been 48 times to asia in the last 10 years. so we’re comfortable with asia and very much agree with the strategy.

>> stay with us, michael ovitz expected to take the stand tomorrow in the trial in which investors are trying to recoup $140 million severance package he received eight years ago. off to delaware live with the latest on that trial coming up.

在线播报
Listen Market briefing --- Matt (slow)
Marsh & Mclennan --- Su (fast)
NYSE --- Julie (slow)
welcome to “world financial report.” i am matt nesto. a change in leadership at the world’s largest insurance broker. plsh marsh―marsh & mclennan chief executive jeffrey greenberg is resigning. his replacement, michael cherkasky, executive with a law enforcement background who has worked closely with eliot spitzer in the past. tonight, spitzer is saying a criminal prosecution of marsh & mclennan is “unnecessary.” he says his goals are better served by prosecution of individuals and su keenan is joining us now with the latest. su?

>> the pressure for jeffrey greenberg to resign has been mounting from the moment new york attorney general eliot% -spitzer filed suit and the%  company’s stock lost almost half its value. greenberg ran marsh & mclennan for the past five years. one analyst said earlier today he expected resignation would help the company move forward.

>> we think the impact will be positive for marsh and the industry. obviously, for marsh, they have to get moving and try to settle the investigation, get a new leader who can stabilize the company and make sure they retain their market leading service base and also their market leading client base.

>> the new c.e.o. is michael cherkasky who ran kroll inc., the securities firm marsh acquired earlier this year. the day of the lawsuit, marsh & mclennan put cherkasky in charge of the internal probe into spitzer’s allegations and the next day he was named head of the brokerage unit, marsh inc., and today, he runs the entire company. cherkasky has close ties to spitzer, serving as his boss in the manhattan district attorney’s office more than a decade ago. one analyst who rates the company a strong buy says it sounds like he’s the right guy for the job.

>> we don’t feel the 45% decline in the stock’s value today since the investigation was announced is justified. we feel there will be hang-ups for marsh & mclennan going forward but we don’t feel like taking $11 or $12 billion off the market cap of the company is meaningful.

>> meanwhile, spitzer’s probe may help create a national insurance regulator in the u.s., an idea gaining support among consumer groups and congress. the consumer federation of america says while such a move might be costly, spitzer’s probe shows state regulation has failed. meanwhile, shares of aon corporation plunged to their lowest price in more than a year on concern it also faces legal problems. neither the company nor the attorney general’s office has commented on the company’s legal status. back to you.

>> and on we go with the earnings beat. we have results from zimmer. the company, z.m.h., the ticker, third-quarter profit and revenues coming in better than expected.%  the stock over 11% over the year and up 1% in extended hours. 56 cents a share, the estimate was for 53, on $700 million. they are revising their fourth-quarter and 2005 sales and earnings forecasts. they see 62 to 64 cents for the coming quarter on $775 to $780 million in sales and for next year, a $2.80 to $2.85 a share on earnings on up to $3.35 billion in sales. zimmer, a medical device maker and the market is pleased with shares trading higher here today. the same cannot be said for the dollar, falling for the ninth straight session on concern oil prices will take a toll on the u.s. economy. it’s the longest losing streak since january. looking to see the dollar bought less yen. last but not least here, stocks closed lower. investors say there are a number of things hanging over the market , take your pick. oil prices, the war in iraq, the economic growth, the election, the outlook for the fourth quarter, earnings season, all television there leaving stocks little changed on the day. paring losses, finishing off of morning lows, afternoon drifts sideways to the finish line. insurers and metals did well in trading today with household products putting pressure on the market . for more on the day’s trading action, julie hyman with the report from the big board.

>> a delicate balance today with stocks higher earlier in the session, closing lower but not much changed. enough changed on the dow jones industrials to bring it to another low for the year, closing at its lowest since late november of last year. the s&p 500, not faring as badly today but not approaching the lows it reached in mid august. today, insurers doing well, returning from declines they had since eliot spitzer began his investigation of the industry. this index alone is down 12% since spitzer began the investigation, even with today’s gains. some of the best performers today, a.i.g., progressive and metlife. also gold stocks doing well today as the price of gold continues to rise. that index up 3.5%, some of the best performers within it, newmont mining gaining today, placer dome, anglogold and freeport-mcmoran. steel doing well with a deal within the industrial industry. it looks like the gains across the industry is due to speculation of more consolidation. carpenter technology gaining tas boosted its dividend and released earnings today. on the down side today, kimberly-clark led household products makers lower. the company came out with third-quarter earnings missing analysts’ estimates and the fourth-quarter forecast coming up short of what was expected. because of that, other household products makers declineing, such as coal colgate palmolive.

>> oil prices fell after reaching another record intraday. norway’s government intervening in a labor conflict that threatened supplies. the price down over 1%, 63 cents. $54.54, the closing price in new york. oil is up 68% this year as threats to production have risen along with demand for oil. goldman sachs chief executive says oil prices in the $70 range could shock the economy.

>> i think the important thing is recognize is this is not a nice smooth process. oil prices that might be slow enough―high enough to slow growth a bit, if they keep going up, at some point the economy breaks. one thing we’ve found historically is when the unemployment rate starts to rise, it usually doesn’t rise a little bit, but you end up in a full blown recession which says if you have a big enough shock to hurt the economy, things can fall apart in a major way.

>> unleaded gasoline you can see falling 2.8%, heating oil down about 1.8% and natural gas futures also down sharply, about 2.6% today. u.s. consumers are going to pay an extra $10 billion to heat their homes this winter according to the american petroleum institute. heating oil prices are up 48% from a year ago. natural gas prices up about 60%. halliburton’s no-bid contract in iraq and the extension of its government contract in the balkans should be investigated. a democratic senator is proposing just that. this after a u.s. army corps of engineer officer says the contracts violated procurement regulations favoring halliburton’s k.b.r. unit in giving and extending contracts without the proper justification halliburton was awarded a no-bid contract worth as much as $7 billion in iraq after the u.s.-led invasion. halliburton was once headed by vice president dick cheney by 1995 to 2000. the company says these are recycled allegations that were dismissed six months ago by the government’s top auditor. the deal between lakshmi mittal and wilbur ross will create the world’s biggest steel maker. we’ll hear from the steel deal makers democracy.