朗读练习作业

Preview of market action
>> and here’s a preview of market action for europe next week from paul george in london.

>> monday kicks off an important week for italy, providing the clearest indication of the corporate health of their economy as 2/3 of the companies report. Monday sees reports from banca intesa. Italian g.d.p. Is seen lagging behind neighbors in the euro zone as consumers there rein in spending. The outlooks accompanying results may reflect concern about the recovery and jobs. Banca intesa, italy’s largest bank by assets, will probably say second-quarter profit rose 8.6% as it shed more than 2,000 jobs. The c.e.o. Has reorganized the bank since taking over in 2002 by selling assets such as most of its latin american units and slashing costs. The bank is set to report Earnings on monday afternoon. Now for something brand new which we hope to be a fixture in the diary, bloomberg’s own p.m.i. Survey, it may show retail sales in the euro zone’s three largest economies fell in august. Don’t miss the first edition out sharp on monday at 0900 hours london time. We’ll also have full analysis of the reports. Germany, france and italy account for 80% for the value of retail sales across the continent. Also due out, german factory orders, expecting to have risen. Perhaps earnings already from italy, also look out for italy’s biggest comment maker and the international cement unit, ciment francois. First-half results due from air likeyed, it may report an increase of more than 14%, helped by acquisitions and increased demand for hydrogen. Some of the highlights for monday in europe.

>> speaking of the week ahead, it would be remiss if we couldn’t look at what was going on in asia. Semiconductor stocks led asian stocks lower on friday and the broad indexes fell for the week in the region, as well. Ron madison from our tokyo bureau has this report on what’s going to be moving markets in the week ahead.

>> in the new week here in the asia-pacific region, the world’s second largest economy, japan, probably grew more than the government’s initial annualized estimate of 1.7% in the second quarter. Economists surveyed by bloomberg say japanese companies likely boosted capital spending for a third straight quarter to meet rising overseas and domestic demand. The government is set to release cap-ex figures on monday and revised g.d.p. Figures on friday. The country’s central bank will probably keep monetary policy unchanged. Deflation showing little signs of letting up and economic recovery appears to be slowing. China’s industrial production growth probably slowed in august for a sixth month. Lending curbs damped expansion and power cuts limited factories’ operating outputs. And economists say thailand’s base of expansion in the economy barely picked up due to violence and rising oil prices, curbing consumer spending there. And australia’s economy may havead ated jobs in august, keeping the unemployment rate close to a 23-year low. The government’s tax cuts have increased consumer spending, fueling demand for workers. The country’s central bank will probably refrain from raising interest rates before an election in october. Inflation is within the bank’s target range now and the housing market is slowing. New zealand’s central bank will probably raise rates a fifth time to 6.25% to curb inflation. That’s what’s expected in the week ahead in the asia-pacific region.

>> a.r.m. Chair quarterbacks and wannabe general managers on alert for high-stakes fantasy football drafts. Many of them are scouring the wires looking for that best pick. We’ll have more on the high rollers with thousands of dollars at stake when we return. >> the national football league season doesn’t start officially until next thursday night when the new england patriots host the indianapolis colts in a rematch of their a.f.c. Championship game. But for some fantasy football fanatics, the fun has already begun with high-stakes fantasy league drafts throughout the states. Bloomberg news reporter mike buteau joins us from atlanta for more on the fantasy phenomenon in this week’s “money & sports” segment. Thanks for coming on. If the jets pay $64 million to re-sign chad penington, how much Would it take to draft him in the fantasy leagues?

>> well, it depends on which league you want to get in. There are several high-stakes leagues out there. The highest stakes is payday sports, entry fee of $3,600 to get into the league. There are other leagues out there where it’s $12.50, $14.50 to get in. We’re talking $1,250 to get into a fantasy league. The highest stake one has only 60 players so you increase your chances but you say this is a phenomenon, if you want to talk about phenomenons, there are 15 million people that play fantasy sports, 12 million alone play fantasy football. This sport is growing. Last year, there were only two leagues that offered prizes of $100,000. This year there’s at least seven leagues offering over $100,000.

>> seems like betting, you would think the nfl would frown upon it.

>> the commissioner says the difference between fantasy sports is you’re drafting individual players, you’re not picking individual games and individual teams so he doesn’t see a problem with it. If you’re picking a backup quarterback or running back here, they’re on different teams, chances of you getting inside information to affect the outcome of the game are not as likely as betting on an actual team.

>> i understand there’s only two weeks left for the nhl collective bargaining agreement and then it will expire so three days of talks in montreal this week. Was there any progress? What’s the status?

>> the status is status quo right now. There’s not much new to talk about except that they did meet for three days, they’ve gone over as much as they can go over. The players’ association wanted a breakdown of all 30 teams and their financial practices. They’ve finished that. The nhl is waiting for the players’ association to come back with a different proposal, something they can maybe break ground and make movement on. They’ll meet again next week. They don’t have a date but they say they’ll meet next week. There’s only two weeks to go and time is running out.

>> two weeks to go, the season kicks off in october. The whole season could get scratched if things don’t clear up?

>> yeah, october 12, 13, right around there, the first couple of weeks of october it starts and if they don’t have a new agreement by september 15, you might be looking at several months of a lockout. You could look at the whole season. Many players have said we’re prepared to sit out the entire year, if not longer.

>> i have to believe baseball and football leagues love that idea.

>> yeah, hockey die hards trying to find something else on tv. You mention baseball. You remember baseball when the lockout, seemed like it was a done deal, it was going to happen, last minute, last hour of negotiations they reached a deal so hockey fans are probably holding that hope, that this follows the lines of baseball from a a few years ago. >> love to talk golf, the masters champion, phil mickelson, agreed to end his sponsorship with fortune brands. Why that―why would they end that agreement?

>> phil has had this deal with titlist for about four years and had another year left on it. Apparently he was looking to renegotiate. They were paying him about $4 million a year. It might not have so much to do with the money. There were a few Behind-the-scenes things that happened. When you look at where he might go? I don’t think it’s nike but callaway is in the market for a guy like phil mickelson.

>> it’s amazing what winning the masters will do for a guy. Mike buteau, appreciate it. Boeing’s chief executive has tipped his hand on who his successor might be. We’ll bring you that story and more when we return.

在线播报
Listen How strong is the job report
Jan Hatzius --- Goldman Sachs
>> Welcome back to bristol-myers -- - “world financial report.” The stock markets down on a friday, up for the week, though, at least the dow and s&p. .3 lower for the dow. The s&p off .4% on Lighter-than-average volume. If you look at the nasdaq, it was the key laggard today, 900 million shares. How strong was today’s jobs% Report and what can we expect for the future? Earlier, erin burnett put these questions to goldman sachs’ economist jan hatzius.

>> on the whole, the number was pretty decent. The headlines were closer expectation, the guts were stronger than the headlines. There’s a reasonable amount of consumer income in the report. Wages were a little stronger. There was upward revisions there. The work week was stronger. So i think if you were worried that the income trend was faltering, i think you’ll be less worried about that now.

>> given that over the past few months there’s been a discrepancy between what economists were expecting and the way the actual number panned out, do you have more confidence in this number than the others?

>> no. I think it’s just that these Monthly numbers are hard to Forecast.% I think that’s a reality that people should get used to. And the―it so happens that economists’ forecasts were. Better on this one but i have no doubt we’ll be off by a couple hundred thousand on either side in the future.

>> you talked about the guts of the reports being stronger than the headline number. One of the things you referred to was wage growth. We’ve seen a lot of numbers about income growth, showing it’s been lagging inflation, that actual disposable income for the consumer is not keeping up with inflation. What is your view?

>> that’s very true. The wage growth numbers have been very poor. In nominal terms and especially in real terms given that you have had an increase in inflation. A monthly report on unemployment is always going to give you information just at the very, very margin, what happened recently relative to, say, six months before that or a year before that. And so the improvement that i was talking about, you know, it’s very, very incremental thing. It doesn’t mean the wage trend is strong, but it’s stronger than it was.

>> what about the participation rate? It appears from the number that part of the reason we saw a decline in the employment rate is because fewer people were looking for jobs.

>> right. The decline in the unemployment rate was just due to a decline in the labor force and bigger picture, the participation rate remains very close to the cyclical low that we had earlier this year. The expectation that people would come back into the labor market as the jobs picture improved hasn’t been borne out really so perhaps there was less slack in the labor market than people thought at the end of 2003 or early 2004 because if there was a lot of slack, you should see people come back as jobs numbers have improved.

>> what is your view right now on the state of the u.s. Economy? We’ve been getting some Weaker-than-anticipated numbers, obviously, today, even on the service sector.

>> i hate to sound like an economic girlie man, but i do have to say that i think the economy is decelerating. We’ve seen the best part of the growth, i think, for quite a while. I think it’s most pronounced in the industrial sector of the economy where we’re seeing a very pronounced inventory buildup and i think the industrial indicators over the next six months or so will weaken considerably. We have the decline in the manufacturing i.s.m. Survey on wednesday and i think that’s just the first step in potentially a pretty significant deceleration in the i.s.m. Survey. I think we’ll work 50 and possibly below in 2005.

>> what does that mean for the fed? If we see a sharp slowdown, what should the fed do at this point when rates are already at an emergency level?

>> i think in the near term, they’ve made their intentions pretty clear. You will get a 25-basis-point hike at the september 21 meeting. And you’ll probably get more hikes beyond that. Once you get into 2005, you know, it becomes a little less clear. We’re still expecting further hikes in 2004, that’s a much closer call, expecting further hikes in 2005. The fed’s forecast is much more optimistic than the market consensus. Our own forecast is less optimistic than the market consensus but ultimately they’re the ones making monetary policy.

>> all right. European averages ended the week higher while asian stocks were lower but enough of the history. When we get back, we’ll preview what’s going to move markets there next week when the “world financial report” continues.

In the he short term it is oversold
Don Ross---Armada Funds---Chief executive officer
>> armada funds chief executive officer don ross says it really doesn’t get any better than this for u.s. Companies, enjoying generous profit levels. But that might change.

>> i think in the short term it is oversold. The question that intel is raising, though, is the fundamentals. The fundamentals were so strong year over year, sequential, any way to measure it. This is the first time we’ve seen the top line, obviously, suffer over the last probably five quarters, really, it has been increasing, calling into question margins which contracted and the whole profit picture going forward, how strong will it be versus expectations which are still high.

>> info tech is such a broad group. I put a chart on the bloomberg with semiconductors and semi equipment counsel 26 -- down 26% and 23%. But then you see software and computer storage really hanging in there relatively speaking, a lot better as far as technology is concerned. So of those groups, what’s your take on that?

>> well, obviously, one of the things driving that is the beta―the data, the volatility of the sector and semiconductors being the most volatile sector they have a beta to s&p of about two. What we saw in 2003 was a dash to trash. Cyclical stocks really won, high beta stocks, high volatile stocks with risk-taking and now we’ve had the reverse as we consider the politics, geopoliticals, and the sectors most leveraged to the ones hurting the most. I think if the economy stays better, the politics and geopolitics clear up, it is likely you’ll see the arrest of the year some of the higher beta semiconductor stocks in particular do better.

>> let’s talk about domestic politics, not geopolitics, if you will. Let’s talk about the election. You said stocks would rally if president bush is re-elected. Am i to assume they will stay flat or fall if senator kerry is?

>> we’re just looking at a partial derivative which is who wins the presidential election but the investment management company at armada funds, we believe taxes are a critical ingredient in the outlook for the financial markets and obviously the tax policies being promulgated by the two presidential contenders are quite different so all else held constant, we think the bush platform for lower taxes is better for the market equities at least in the short run.

>> what is behind this belief of yours that equity returns will be challenged over the next five to 10 years?

>> i think if you look at the overall landscape, the biggest problem we have is our economy in a sense is from old milwaukee in other words, it doesn’t get any better than this. So we really say the Fundamentals are good but the rate of gain will slow. That’s both economic growth and it’s certainly profit growth. Profits right now at a level of g.d.p. At the highest they’ve been in many years so there’s really one direction for those to go relative and interest rates also a final ingredient. How much lower can they go. If they go lower, it’s probably bad. So put fundamentals good but slowing, interest rates low but having to rise together with the valuation level that, while not rich, historically, on a price-to-earnings basis, is not a cheap level from which to start, we think you’ll get profit gains in the next five to 10 years in the mid but lower-type single digits, certainly not 10% to 15% we saw in the 1990 bull market .

>> the markets in general expecting a quarter-point increase in september, i think you fall into the camp for the federal reserve. I’m more interested in what will happen in 2005. What’s your forecast there regarding rates?

>> we have a forecast of the fed reaching 2.5% in june, up another 100 basis points from here. And matt, that’s probably where we at armada funds differ from the consensus. With the yield curve steep, that implies short term rates will rise. We think if the economy slows and uncertainties clear, the fed is not likely to take rates up to that 3.5% or 4.5% that would be implied in the yield curve by the end of 2005 and certainly by most forecasters. So we think the fed will be on the margin next year, more accommodative than is currently priced in but it’s a long time between now and then.

>> stockpileing and speculative buying caused the latest runup in crude oil prices according to bessemer trust’s christine callies. Does that mean prices are poised to fall now? We’ll hear what she has to say up next.

在线播报
Listen Market briefing --- Matt (slow)
Latest job report --- Su (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
Welcome to “world financial report.” I am matt nesto. Let’s give you the numbers on wall street here today. The dow and the s&p s&p 500 both down .3 and .4 respectively on light volume. The nasdaq, the worst of the three, the story of the day with intel shares leading the semiconductors lowest. The nasdaq down 1.5%. There’s the volume -- Weekly tally, up five of six weeks for the dow and s&p 500, .6 over the past five days for the dow and .5% for the s&p. Nasdaq can’t get it going, 1% lower over the past five trading session. The bonds were weak today, the yield pushing up to 4.29% for the 10-year. The dollar celebrating the same thing that the bonds fell on, strength in the job market . The dollar was up against all three of the major rivals. The u.s. Labor department released the closely watched employment report for august, non-farm payrolls adding 144,000 workers, sloilts below the average economists’ estimate. The first acceleration in five months. Manufacturers, at the same time, added 22,000 jobs, the sixth gain in seven months. At the same time, the Unemployment rate fell to 5.4%, the lowest level in nearly three years. The latest jobs report takes on added significance on the presidential campaigned. Su keenan has the story.

>> president george w. Bush already using the latest data, saying today’s lower unemployment rate of 5.4% is below the average for the past three decades. The august payroll data widely viewed as a positive for the economy.

>> job creation of 144,000 jobs, we are seeing good, solid, steady growth. It may not be at the anticipated levels of some kind of hockey stick but we are seeing good growth and compared to last month, this is very good news for the u.s. Economy.

>> democratic challengeer john kerry says the bush administration is the first in history that has failed to create new jobs. His economic policy director says even with today’s agains, bush falls short of his predictions. Bank of tokyo-mitsubishi’s analyst says today’s upward revision to the prior data showing 200,000 jobs added in the past two months or total of 1.7 million since last august is a boost for bush.

>> the jobs number is very, very important. It is a key number for the market . It is a key number for the bush administration and for the reserve. A resumption of growth would be shown by a very robust number in jobs. You really can’t have a self-sustaining recovery in the economy without a strong jobs report.

>> american research group shows just under half of americans views the economy as worsening and 52% of registered voters disapprove of the way bush is handling it. Senator charles grassley says people do not yet see the positive trend.

>> even though we have all these positive trends of economic indices, still, the public has not accepted that. The president’s goal of Campaigning the next 60 days is to make sure that people understand that.

>> daiwa securities michael moran says the bush administration needs to focus on more than job creation in order to restore confidence.

>> we need the oil situation to straighten out, the middle east situation to settle down and once we’re past the election, there will be less uncertainty.

>> so far this year, the economy has gained, on average, 180,000 jobs a month.

>> thanks, su. The dow and s&p gained for five of six weeks. Julie hyman has this report from the big board.

>> despite losses in today’s session, the dow and s&p finished the week higher. The s&p was up .5% while the dow gained about .6%. I wanted to look at the biggest losers and winners of the week in terms of groups and individual stocks. We had energy and also the hotel and leisure stocks doing the best on the week. Energy stocks, as the oil price bounced around, finished the week higher. On the down side, Semiconductors, as one might expect, and media stocks doing poorly. In terms of individual movers, winn-dixie down more than 20% on speculation about the future of its business. On the upside, we had noble corporation representing energy stocks, benefiting, in part, by an upgrade from merrill lynch earlier in the week. Today, we had two competing elements on the session. We had the jobs report and on the other hand, the effect of intel cutting its forecast. From the jobs report we saw a lot of food and staple stocks doing well today, real estate stocks doing well today, benefiting as investors were positive on the jobs report. We also had employment services stocks doing well today, such as robert half international and manpower rising today. On the downside, we had the semiconductors, intel cutting its forecast and semiconductors, biggest decliners within the index today, down a whopping 6% and texas instruments out with its mid quarter update next week. I’m julie hyman.

>> the nasdaq ended lower. Intel leading decliners there. And june grasso has this report from the nasdaq marketsite in times square.

>> intel’s part of its revenue forecast was the weight on the nasdaq today and today intel closed at its lowest price since june of 2003. The pressure was on the Philadelphia semiconductor index because intel’s forecast for weakening demand for electronics coincides with comments from semiconductor makers worldwide questioning the health of the via. Leading the philadelphia Semiconductor index down, maxim integrated, k.l.a.-tencor, xilinx and linear technology. Today, 3com joined the chorus. Its switches run corporate data Networks and reports First-quarter sales of below Forecast.% It said in june that its revenue would be unchanged or slightly higher than the fourth quarter’s $183 million. Electronics for imaging which designs software and equipment for digital printers and copiers said third-quarter profit will be less than forecast as sales of its high-end printer management servers were below expectations. Profit in the third quarter would be 12 to 13 cents compared to analysts’ estimates of 26 cents. One stock that did do well was an internet security company, r.s.a. Security, on track to achieve third-quarter guidance. The maker of internet security products reiterated its third-quarter profit forecast of 10 to 12 cents a share. Kmart was among the top 10 performing members of the nasdaq 100 today. Sears roebuck buying 45 stores from kmart holdings for $524.5 million in cash. Those are the final details of a deal announced about two months ago. June grasso, bloomberg news, at the nasdaq marketsite.

>> a top money manager says he doesn’t expect returns on stocks to exceed mid single digits for the next decade. 10 years of that? My discussion of don ross of armada funds will be aired next.

Education stocks
Bear Stearns---Childe, Jennifer---Analyst
>> cnn, fox news and msnbc are winning viewers and advertising from their increased coverage of the u.s. Presidential election campaigns has improved. The three largest cable networks more than doubled ratings for coverage of the democratic convention in july. Broadcast networks abc, cbs and nbc showed only three hours of the four-day convention, the same as this week’s republican coverage which showed three hours on the network. They lost 18 1/2% of their viewers. But the cable networks will also likely attract 20% of the $600 million spent on political ads this year. Well, corinthian college shares rose and, boy, did they rise, after the company said fourth quarter earnings met expectations and the company maintained its forecast for the current quarter. Some investors had been Concerned that corinthian would lower its forecast amid investigations of its records. To talk about corinthian and other education stocks we now bring in bear stearns analyst jennifer child who joins me from the company’s relatively empty trading floor there. Jennifer, thanks for being on the program. 23% in one session is the move today for corinthian colleges. Why?

>> bob, i think it was mostly a relief rally. There wasn’t anything Particularly new in the release relative to what we expected. The company had warned investors on august 2 that it was going to miss expectations for the fourth quarter and that day the stock got cut virtually in half. So i think the investors have been so skittish on the group in general that when we saw no new negative news that things were largely as they appeared, there was a relief rally.

>> now, tell us how corinthian fits in against some of its competitors, i.t.t., career education, etcetera. What is the competitive Landscape like for corinthians?

>> a good question. They’re all a little bit different. Corinthian is more after vocational school operator, about 55% of its students are enrolled in allied health care programs. That means medical assisting, massage therapy, dental assisting. Another 25% or so in auto repair, motorcycle repair. Then the balance are in more traditional two-year, four-year schools. It’s―each company is slightly different. Apollo tends o focus on working adult students getting their bachelors and masters degrees. I.t.t. Focuses on technical programs. Career education on cull nareir Culinary, business design, a number of different areas.

>> many of the companies have had issues with regard to their governance. Corinthian, also career education and i.t.t. All facing inquiries by u.s. Officials amid allegations of fraud, etcetera. Why does this one group seem to have so much trouble with at least investigations of inappropriate conduct?

>> well, it’s almost like health care in a sense but the government makes it very, very easy to defraud it in the form of title 4 funding. Title 4 is the source of most of these companies’ revenues. Title four being student loans, grants, etcetera. And with companies so large with decentralized operations it’s easy for some rogue employees to take advantage of the system. The lawsuits are all slightly different but they tend to relate to not only title four improprietiesies but misleading potential students about potential salaries, job opportunities, the ability to transfer credits, those sorts of things.

>> well, in particular, if you look at the earnings list on corinthian colleges for the last several quarters, last several years, it’s quite impressive. Better than 20% earnings growth for i believe here more than 16 quarters better than 20% earnings until this most recent quarter and the forecast for the current quarter. The current quarter was third and the previous quarter was 13 and the current quarter was minus 11%. What happened to the string of 16 quarters of better than 20% earnings growth for corinthian?

>> right. Well, i think growing pains sums it up. The company opened 10 new campuses this year, branch campuses. It was also absorbing a very, very large acquisition that it made last year. The company tends to acquire underperforming assets, underperforming groups of schools and turn some around through improved marketing . And better management. So i think it’s just bit off a Little bit more than it could Chew this year.

>> well, if i can just Interrupt you, we just showed the stock has lost half its value year to date and if investors hear news of acquisitions and they think it makes sense they don’t take half of the price―half the value out of a stock. There must have been a problem.

>> right. The integration of these Acquisitions and opening up new campuses too fast. They didn’t get the new Enrollment they were expecting and they had all these fixed costs associated with the 10 new campuses. Bears would argue they are facing competitive headwinds and counter cyclicality meaning students prefer not to enroll in health care programs in this market . We think those concerns are exaggerated and the company isn’t anymore susceptible to this than other companies but i thought i’d throw it out there. That is what some of the bears think.

>> are the stocks beter in a good economy or a bad eek sni

>> historically they’ve been beter in a bad economy but they shouldn’t be dramatically worse in an improving economy because students, people are looking to improve their lives by furthering their education.

>> all right. Thanks to bear stearns analyst jennifer childe for her remarks on the education stocks.

>> thank you.

>> when we come back after the break less than a month after hurricane charley hit florida frances is poised to strike. We’ll take a look at the likely impact on insurance companies.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Matt (slow)
>> welcome to the final hour of “the world financial report.” I’m bob bowdon. Retailers report august sales tomorrow and the numbers will be closely watched because the back-to-school season is the second biggest after christmas. Analysts expect august retail sales likely will be the weakest in 17 months. The expectation is that same store sales gained 1 1/2% to 2% from a year ago. The international council of shopping center originally forecast sales would grow as much as 4%.

>> one of the problems is if you appeal to the low-end consumer, like 99 cents stores, like big lots, you may have a problem because your customer, like wal-mart, your customer is hit so hard in the pocketbook on their disposable income and they are running scared.

>> wal-mart cut its august forecast last week estimating that sales could be unchanged to up 2% from a year ago, blaming soft back-to-school shopping and hurricane charley. Another factor is falling wages. Federal statistics show the average paycheck for about 80% of workers after adjusting for inflation has fallen during the past three months.

>> i think psychologically the real impact of anything from gas prices to employment is going to take place at the very low end, at the deep discounters. But i think from a broad standpoint a lot of the retailers are going to see a surprisingly resilient next few months.

>> analysts say the biggest sales gains for august could come from specialty clothing chains and high end stores, which typically attract consumers who are less affected by higher gasoline prices. Well, speaking of energy, crude oil surged after the u.s. Crude inventories dropped more than expected last week, closing price in new york was $44 a barrel. You see there that’s up almost 4 1/2% in one session. Now also there’s the inventory number. The energy department reports that oil stockpiles fell 4.2 million barrels last week, the lowest in about 5 1/2 months. Supplies were expected to drop only 400,000 barrels. Among the other energy movers on the day we saw unleaded gasoline in new york on a wholesale basis up over 4% there and to $1.18 -- $118.90 and heating oil up 5.3% and natural gas futures down 2.15%. Well, record high gas prices and a declining consumer confidence cut demand for cars and trucks last month. The big three u.s. Auto makers reported all greater than expected declines in august sales. General motors, the world’s largest auto maker, sales fell 14% from a year ago. Number two ford reported a 13% decline and daimler chrysler said u.s. Sales were down 5.7%. Ford’s august sales included a decline of 26% for cars. The auto maker says that it will reduce production by nearly 8% in the fourth quarter. That’s the biggest planned cut in more than a year. G.m., ford and chrysler all continue to raise incentives in august. Economists say that consumers have gotten used to the rebates and that it still may not be enough to trigger new car buying.

>> it’s going to be tough to get any economic growth out of a sector like autos where we’ve come up a long period of very low interest rates and incentives as well and it’s really difficult to continue the sales at a brisk pace as a result.

>> instead, he says, consumers are devoting their money to filling up their gas tank. Shares today of the big three auto makers were mixed as general motors and ford moved lower. Daimler chrysler shares up .8%. Manufacturing expanded at a slower pace in august as fewer companies reported an increase in orders and production. The institute for supply Management’s factory index last month fell to 59 from 62 back in july. Economists had expected a reading of 60. Anything above 50 indicates expansion. The index has shown expansion since 2003, since june of 2003. activity at the nation’s factories may be slowing but construction showed no sign of participating in the slowdown. Spending on construction rose .4% in july to a record annual rate of $997 billion. The rise was the fifth in six months and followed no change in june. Economists say the data Suggests that construction will continue to support growth in the third quarter. The two-day rally of treasuries stalled as the i.s.m. Number fell less than some traders expected. Checking treasuries on the day, we say not much movement in the 10-year, the yield stayed unchanged at 4.12%. Moving on, the five-year was up 2/32 and the yield data 3.3%. And the shortest end of the curve also not much movement there, the yield just down one tick there, 2.38%. Well, moving on, a rally in stocks faded amid the surge in oil prices plus traders say the evacuation of a washington building brought fears of terrorism back into the market . Let’s get to the closing numbers as they finished. It was a mixed market if you call the dow down which was more or less unchanged. Down just five points for the dow at 10,168. S&p 500 up as you see there .15%. 1105. The nasdaq was the winner of The day up .67% finishing at 1850. On the big board 1.14 billion shares traded and we have advancers beating decliners by almost 2-1. Over at the nasdaq 1.42 billion shares traded and advancers beat deck decliners though not by the margin they did at the big board. The dow and s&p little changed today. Oil and health care stocks were the―among the movers to the upside. For more on today’s trading action we bring in julie hyman at the big board. Well, perhaps we’ll have julie hyman a little later. Moving on here, concerns over politics, terrorism, oil prices and the economy have seen investors seeking refuge in big companies that generate predictable profits. Stocks editor matt nesto looks at the near-term outperformance of large cap stocks with respect to some of their smaller brethren.

>> big vs. Little, the Quintessential david and goliath battle. If you take a look though at the volatility of late, and the outperformance of the largecaps there is also a store oir maybe a lesson, an old adam depending how long you’ve been at it to be learned as well. Take a look at the first chart. Small, medium and large this is quart tower date, the three particular indexes and you can see the largecap index, the yellow line on top, the best performer. That’s the s&p 500. We’re down about 3% quart tower date. Below that the mid cap index down 4.3% and then the small caps down about 5 1/2%. What’s important here is this volatility equation that i talked about and that is the low point that at one point during this quarter, the small cap index had fallen as much as 12%. The mid caps were down about, well approaching 10% while the worst that it―the worse it got for the small caps was about―excuse me, the large caps, was about 7%. So that volatility although greater for the small caps and mid caps also can spell long-term performance. And opportunity. Check this out. Five years, the outperformance for the small caps vs. The large caps is market . White line, small caps. Up 55%. The mid caps, below that, up 43%. And way down yonder here, bobby, we’re down 18% for the s&p 500. So that’s why this recent comeback is noticeable, folks. You want names, you’ve got names here. These are the quarter-to-date winners for you. Goodyear tire, 25% and only 2/3 of the way through the third quarter. New month mining just jumped into the top five today with a 1% gain. Genzyme, pulte homes, does this jump out sneer seven times forward earnings. It does to me. That’s half the p.e. I jumped over the comparisons, guys, but forgive me. I’m just going to go with the losers here, delta, ciena, andrew, teradyne, broadcom down 40% to 50%. That’s it. Back to you.

>> thank you, matt nesto. Appreciate that. We have breaking news for t.h.c. The news is the company says it is cooperating with a subpoena from the san francisco u.s. Attorney. The subpoena relates to documents that pertain to medical directorships. The subpoena also forced some physician relocation pact. The company said it is Cooperate wg a subpoena from the u.s. Attorney in san francisco. You see in the regular session tenet shares just up 1% finishing at $10.53 but in the extended hours trading, the latest trade is also $10.53. so unchanged after that news. Moving on, the investors that have filed a lawsuit against software maker oracle may be getting another chance. A federal appeals court has reinstated a suit that claims oracle improperly accounted for about $228 million. The lawsuit, which has already been dismissed three times, says that in 2000, oracle created phony sales on its books to hide a slowdown in demand. The judge in today’s appeals case says there is enough evidence against oracle to have the case reinstated. Shares of the world’s third largest software maker have declined almost 22% in the last 12 months. When we come back after the break shares of corinthian college surged today on earnings news. Coming up next we’ll talk with a bear stearns analyst about her outlook for education stocks.

How much to expect in sales through Kawasaki
FuelCell Energy---Leitman, Jerry---Chief Executive Officer

>> crude oil futures fell on tuesday as supply concerns eased. iraqi exports rose and russia said it would increase production this year. looking at crude on the day, down .4%. the drop extends a decline that has cut more than $7 a barrel from the high price of over $49 a few days ago, in the last eight sessions. still, prices are 34% higher than a year ago. checking other energy movers, gasoline, wholesale prices for gasoline, unleaded gasoline in new york at more or less unchanged. heating oil down .7% and natural gas futures, big move there, down over 3% at $5.07 per million b.t.u. fuel cell energy commercializes fuel cell power plants for electric generation. on the day, the shares rose after the company announced a deal to market in japan. yesterday, the company beat wall street estimates by a penny in its revenue reports. the c.e.o., jerry leitman, joins us from stanford, connecticut. what might have driven your share price up over 8% today is the fact that you announced an agreement with kawasaki, that that company will distribute products in japan and you said you expect delivers to begin in 2005 or 2006 but your announcement was devoid of quantification. can you give us a sense of how much you expect in sales through kawasaki?

>> kawasaki will be a packager and distributor to our main partner in japan. what we got is an electrical equipment maker who can package our products for the japanese market and distribute on behalf of our main partner there. marabeanie ordered four megawatts this year of our product and last year was three megawatts and we expect this to continue to increase.

>> can you give us a dollar value?

>> a mega-watt to us is $3 million so five megawatts is $15 million in revenue.

>> another issue is the town hall meeting where the congressman announced federal funding of dual fuel cell carbonate fuel concepts. he says the funding will result in definitive contracts to meet the military’s desire for applications. how much will that be worth to you?

>> that will be $2 million. we have a total of $7 million in appropriation in the defense bill passed and signed into law and with the help of the entire congressional delegation from connecticut, our senators and congressman larsen and congresswoman nancy johnson. we’ve had bipartisan support and we see the military looking at our products for high reliability applications and dual fuel so that if natural gas grid goes away, they have backup with logistics fuel to operate the power plants and generate power for critical military facilities.

>> your company has had quarter low losses all the way since the first quarter of 2000. can you give us a sense of when you’ll be profitable? >> let me first address the strategy. it’s a typical new technology strategy. first we select the markets we want like the military and universities and hospitals and then we make sure we get products to the market segments, make sure they’re satisfied with the product and they’ll drag in the broad market and then we drive costs out of the product. as those two things occur and broad volumes come into the products at the same time we’ve driven costs down, we’ll go to cash flow break even. that could be a year from now or longer. the good news is --

>> how long might it be?

>> a few years at the outside. i think the good news is two fold, one is, we’re the only ones in that marketplace. are the competitors are two or three years behind us so it’s our market to win or lose. the second is, once the market tips, volumes go vertical and we only need about 50 megawatts of production a year to get to cash flow breakeven. that’s a small amount of power plants when you look at the world buying 75 to 80,000 mega-watts of power plants.

>> you said cash flow positive in a few years, do you mean three or four years?

>> it could be two to three years. it’s hard to predict when the broad market will come in.

>> are you saying it won’t be longer than three years?

>> i don’t believe it will be but we don’t forecast that. it will be at 50 mega-watts but if you look at some of our customers like starwood hotels, we have three units in the northeast and now we’re looking at the west coast. any of our market segment can generate way more than 50 megawatts a year and that volume is a fairly low volume rate.

>> you said your year-to-date fuel cell product sales were 7.6 million compared to 12.2 million last year. that’s negative progress, right?

>> the sales revenues will go up and down depending on how long the selling cycle is because we look at getting both state and federal incentives to defer the cost of the protect while it’s low volume and higher cost and that selling cycle is choppy.

>> that’s all the time we have, our thanks to fuelcell energy chief executiveiery―jerry leitman for joining us.

在线播报
Listen Market briefing --- Bob (fast)
Chicago-area businesses --- Su (fast)
Nasdaq --- June (slow)
welcome to “world financial report.” i’m bob bowden. there are new signs the u.s. economic recovery is slowing. consumer confidence falls from a two-year high on concern about job growth and oil prize playing a key role. and chicago-area business are expanding but with fewer orders. su keenan has the details with the conundrum, expanding but fewer orders.

>> it’s a different and slower rate.% the drop in consumer confidence and slump in the growth rate of chicago-area manufacturing caught many economists by surprise. both indexes fell more than the median forecast of economists surveyed by bloomberg and both underscore the theme running through most of the recent economic dat -- - slowing growth. rand financial’s frank lesh.

>> the shock on both of these numbers, much weaker than expectations so i guess we’ll work higher most of the day.

>> the data moved the bond market higher and the dollar lower against the yen and euro. as you can see, the conference board’s index of consumer confidence shows the first decline since february, falling below 100. that’s from a revised reading of just over 105 in july. the conference board’s delos smith says american consumers are scaling back buying as job growth fades and energy prices rise.

>> the number one story will be the oil prices and again, yes it’s down, it didn’t reach $50 but $42 is still very, very high. it needs to get to the $30 to $34 category.

>> the consumer confidence reading is reasonable in the view of barry james with james investment research, now predicting a year-end rally for stocks.

>> particularly when you’re above 85 on the confidence number, that’s not a good sign for stocks, it’s growing too fast. and one of the other numbers, the jobs hard to get figure. typically when it’s less than 30% saying jobs are hard to get, that’s not good for the stock market . the blows coming not from weakness but maybe too much strength in the economy.

>> the decline in the chicago purchasing manager’s index, reflecting showdowns in orders and production, falling to 57.3 this month from july’s 54.7. it is the third measure this month showing slower manufacturing after the second-quarter pullback in consumer spending. bank of tokyo-mitsubishi’s ellen beeson says the labor market is key.

>> i wouldn’t call it unhealthy. we are creating jobs. the type of jobs we’re creating are more part-time than full-time and that’s where you see anemic personal income numbers feeding into the consumer confidence.

>> job growth slowed in the four four-month period through july.

>> thank you, su keenan. moving on to the dollar, weakening against the euro and yen after the economic news. on the bloomberg terminal, i’ve charted a six-year chart of the euro against the dollar and you can see the rise in the euro today indicating weakness, of course, in the dollar, over 1% move right there. as you see, the euro at almost $1.22, $12180 right now. you can see the trading range for the euro, this is $1.24 for the euro and this is $1.18 for the euro. we are in the middle of the range. today’s report suggests a slowdown in the economy may extend beyond the second quarter. analysts a that would erode demand for u.s. assets and the currency to buy them. the dollar surrendering gains made last week when fed governor ben bernanke said the economy’s soft patch was temporary. treasuries rose on the disappointing economic data, signs it may not be a soft patch stoking speculation the federal reserve may slow the pace of interest rate increases. the yield down to 4.11% on the 10-year. stocks were little changed on the day, although they had a ride down and back up again late in the session. technology shares declined after analysts said intel’s third-quarter revenue will trail the highest estimates. let’s get to the closing numbers as they settled on thursday with the dow up .5% as was the s&p 500. the nasdaq was little changed on the day. checking volume at the big board, slightly more volume than some of the record low volumes we’ve had lately, 1.14 billion shares on the big board with advancers beating decliners two to one. at the nasdaq, also advancers beating decliners, 1.3 billion shares traded there. checking other major market averages, green arrows for the nyse, amex and russell 2000. the nasdaq closed higher for the day but lower for the month. june grasso has details from the nasdaq marketsite in times square.

>> the nasdaq fell 2.85% for the month, and not surprising with the problems that tech stocks have been experiencing. the worst performing group for the month was the nasdaq computer index, down six points. analysts have been pointing to a concern about the buildup in inventories for chip stocks and also looking at another indicator in the nasdaq, dragging it down this month, is the philadelphia semiconductor index, down 11.4%. looking toward today, one of the worst performing stocks in the nasdaq 100 today was veritas, the world’s number two maker of data software storage agreed to buy kvault software for $225 million to add programs that archive email, the third acquisition for veritas today. earlier today, gary bloom, the c.e.o., said the acquisition leapfrogs veritas to where it wants to be. one of the best performers in the nasdaq 100 today was juniper networks, the maker of routing gear for phone companies has been raised to outperform at wachovia. wachovia raised its profit forecast saying juniper will benefit as business spending picks up in the second half of 2004 with telecom companies installing voice-over i.p. equipment. looking at apple computer, merrill lynch bumping up its 2005 estimates for apple computer from earnings of 87 cents on $9.30 in revenue to 90 cents on $9.53 billion in sales. merrill said it was making the revisions because of the new imac g5 and revised sales estimates for ipods. june grasso, bloomberg news at the nasdaq marketsite.

>> intel shares were lowered, the worst performing dow jones industrial stock after three wall street analysts said the company will not meet the high end of its revenues forecast when it gives the update on thursday. research notes from morgan stanley, j.p. morgan and prudential equity group reached similar conclusions, the top 1/3 of intel’s revenue forecast will be eliminated in the update. back on july 13, crarg craig barrett gave this third-quarter revenue forecast, between 8.6 and 9.2 billion. today, mark edlestone said the new low end will be 8.5 or 8.6 but the high end will only be 9.0 billion. two other analysts predicting the new high end will only be $9.0 billion. morgan stanley’s edlestone is cutting his third-quarter intel forecast to $8.7 billion and morgan stanley’s analyst cutting his forecast, as well. what’s going on with all of these revisions lower in the analysts’ forecasts? edlestone wrote that the demand for intel may be more disappointing than thought and that intel’s original third-quarter forecast was unusually aggressive, saying the midpoint was for revenue growth of 11% compared to a average of 7% revenue growth from the last 10 years. j.p. morgan’s analyst said intel margins go south for the winter, saying inventory levels have risen for 90 days, tying the highs since 1995. for his part, the analyst from prudential said his asian channel checks indicate flash memory demand and back-to-school sales are coming in lighter than expected.

>> in the last couple of weeks, most analysts on wall street have lowered their numbers. so unless they come in with something very drastic, let’s say well below 8.6 billion in revenues this quarter, i don’t think there would be that much of an adverse reaction because it’s been well advertised.

>> intel shares lower today by 2%. when we return, fuel cell says it has a deal to become a packager of power plants in japan. we’ll speak with the company’s c.e.o. about the deal.

Financial markets are somewhat like weather
YALE --- MANDELBROT, BENOIT --- Professor / Academic
>> welcome back to television.% current financial theory tends% to underestimate risk. that’s the view of benoit mandel mandelbreath, father of fractile geometry.

>> a factile is pattern or shape whose parts echo the whole. and its power lies in its ability to expression complex data in a few simple formulas. ban wasays―benoit says that financial markets are somewhat like weather.

>> has to go step by step and the phenomena which science has conquered are phenomena which are not varying badly and are well defined to measure the loudness, the picture by frequency and color by frequency and heaviness by number, et cetera. one aspect of reality which science has not touched until my work is roughness and roughness is everywhere so i immediately, to explain the riskiness of markets , i’m obglijed to speak of the riskiness of the weather.

>> your work points out that conventional theory would predict index swings of the dow of more than 7% in one day should come once every 300,000 years but in fact the 20th century so 48 such days alone so clearly there’s a difference between theory and reality and that leads me to the question on prices. bubbles, you claim, in terms of pricing, are inevitable.

>> bubbles are inevitable for the reason that price is a quantity which is specific economics. many aspects of everyday life, financial life, are intrinsic, a number of shaped that are well defined but prices depend upon participation. in ordinary physics, the dissonant events don’t count much but you’re interested in the bell curve.

>> you’re a basher of the bell curve.

>> because the bell curve represents the data so poorly on the stock market and so poorly the data on the weather. the weather can be extraordinarily bad, well beyond anything on the bell curve. you can say the very bad weather doesn’t belong to the same universe of thinking as odinary odinary―ordinary weather but i don’t like this attitude because it’s giving up the outliers and giving to another field of research. the outliers, the large values are very, very common and i don’t see why to separate them and the rest and if i tell, say that outliers are somebody else’s business, i get very little business for myself because the bell curve, although it concerns most cases, does not concern the most important cases so in this sense, the big difference between established thoughts of physics and the newer parts of science which include economics, finance and include certainly the weather and many other things is in extreme cases, extreme events are the most important ones and also extreme events can be handled.

>> how do you address your critics who say that fractile analysis and fractiles really are not valuable in terms of how they do their day-to-day work?

>> well, they may perhaps should maybe should change their way. but the big issue is not only to increase one’s income but to avoid ruin and risk ruin are completely very strongly linked. very often a portfolio which is very daring and increases one’s income has xaerlgged -- extraordinarily higher risks of a ruined ending and the probability of ruined is extremely essential and perhaps more essential for a bank or country than it is for an individual because the individuals ruin, ruins the individual and maybe some other individuals but does not create general havoc whereas the ruin of a big major bank certainly creates conditions which are extreme and very often unacceptable. the same way as the analogy for the weather, the question is not how to predict the next storm and intensity of the next torm, it’s a question of how to live comfortably in a place for a long period of time. you build a house to last a certain amount of time. and if you build it on the conditions that are too dangerous, it’s not going to last long enough.

>> spoken only like he can, his work suggesting that the basis of modern financial theory, bob, is wrong. so there you have it.

>> it’s always good to mix things up a bit, that’s how you have fun in this business.

>> absolutely.

>> the fractile theory of finance is spelled out in this book, “the misbehavior of markets ,” it’s a fractile view of risk and reward. one heating oil buyer says he has sticker shock. the energy department predicting this will be the coolest winter ever for heating oil.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
Intel --- Matt (slow)
welcome to “world financial report.” crude oil prices fell for a sixth session in seven today. there were reports that iraq’s oil exports were not hurt by a pipeline explosion. shipping agents say flows to southern export terminals are near capacity. crude oil on the day down 2% closing at $42.28. oil has fallen 14% since reaching the high of $49.4010 days ago as violence in iraq diminished and traders last week trimmed bets that oil prices would rise according to a commodity futures trading commission report. among the other energy movers on the day, new york unleaded gasoline wholesale level, down 3%. heating oil down 2.25% on the day, natural gas futures up close to 1% at $5.23 per million b.t.u. stocks fell in the slowest trading day this year -- treasuries rose after reports showed that personal incomes rose less than forecast, just up .1%. the personal income number. 13/32 the upside for the 10-year treasury. for more on today’s trading action, we bring in julie hyman at the big board.

>> trading volume on the new york stock exchange today, the second lowest of the year, just squeaking by friday’s volume. under a billion shares traded, again, however, we did see both the dow jones and s&p trading lower today. one of the big drags on the index, tyson foods cutting their profit forecast for 2004 seeing lower prices for chicken and beef and raw material costs not declining as expected. they joined several meat processing companies cutting their forecasts, including hormel and sanderson farm. we also saw pilgrim’s pride and smithfield reporting today. semiconductors ahead of intel’s mid quarter update showing weakness. semiconductors as well as technology hardware stocks declining today. one of the few groups of strength, property. l.n.r. is the real estate developer spun off from lennar, agreed to be bought by sybaris group. also, interstate bakeries, this could be bad news for people who like twinkies. the company delayed filing its annual report with the u.s. securities and exchange commission, saying it may be out of compliance with debt agreements and may have trouble continuing as a going concern. i’m julie hyman with bloomberg news at the new york stock exchange.

>> the nasdaq had the lowest full day of trading volume since august of last year. our june grasso has details from the nasdaq marketsite in times square.

>> technology stocks were the drag on the nasdaq today. now, all the economic indexes which make up the nasdaq closed lower today but the worst performer was the computer index. some of the stocks dragging that index down were cisco systems, intel and microsoft. microsoft, whose software runs almost 95% of personal computers said on friday that it delayed the next version of its windows p.c. operating system until late 2006, two careers after first promising the program. credo health, provider of contract pharmacy services and drugs for hard-to-treat illnesses such as hemophelia and multiple sclerosis fell after warning that 2005 results would be hurt by low reimbursement rates for certain drugs. we also have another healthcare area stock, dent supply international, world’s largest maker of artificial teeth, likely to have increased sales as aging baby boomers push up demand for dentures and other dental products, according to “barron’s.” imclone traded lower. many patients on the drug erbitux may be going off of it, hurting sales and disappointing investors according to one analyst who rates the shares neutral. doing well today was u.s.ay ways airways. the pilot’s union leadership said it’s considering a new contract proposal from the company, which is seeking nearly $300 million in pay and benefit cuts to help avoid a second bankruptcy filing and compete with low-cost carriers. the airline is trying to cut back on $1.5 billion on annual costs. june grasso, bloomberg news at the nasdaq marketsite.

>> intel says it’s built a test chip with a process that creates faster circuits. intel packed 10 million transistors into the area the size of the tip of a ball point pen, using 65 nanometer technology to shrink circuits inside chips, allowing twice as many transistors in the same space. analysts say that puts the company as much as 12 months ahead of competitors. intel shares still closing lower today as investors worry intel may lower its revenue forecast thursday. with more on that, we turn to matt nesto who is over at the stocks desk with more on intel, right, matt?

>> oh, yes, bob. we talk about the mid quarter update, a bellwether issue. but the last four mid quarter updates might show differently. starting with the numbers as expected after the close of business on thursday, the company with second-quarter results, 8.6 to 9.2 billion dollars. the midpoint between those -- interestingly, i love this kind of stuff, the actual range of estimates from the analysts on the street are 8.6 to 9.2, actually in line with what the company says. the average of the estimates is 8.8, the median. intel actually does a very good job in terms of delivering historically so on what it says it will do in terms of sales. the average surprise, positive or negative, over the past five quarters, is .5% so they’re within .5%, typically, of what they say they will do on the average. the two-week estimate change of 16 million shows that really not a lot of tightening or tweaking going on recently with the estimates. so looking at the share price, on to the bloomberg we go. we all know that intel is down 32% year to date. this chart goes back to the trough of the market , march of 2003. the green line is estimated p.e., i need to tell you that. forward p.e., price-to-earnings. the green line is the average over that period of time. you’re just under 24, the average. we’re sitting right now at 18 times and that, too, is corresponding with about the 14-month low that the share price itself is at. last but not least, speaking of the share price, i mentioned what history tells us, the last four, they’re all circled here, two times the stock was up, two times the stock was down. but i think market observers might point that the down ticks were more a reflection of the broader market than they were the news in and of itself because the company typically does tighten up.

>> i was looking at the trailing p.e. of intel, the lowest point since march of 2001 and the other question whether it deserves to be that low based on growth. thank you. when we return, fractile geometry used to handle complicated events, now generated by the model.

A preview of market action in London
A preview of market action in Asia Pacific
>> for a preview of tomorrow’s market action, we go to our london bureau.

>> time to look at what’s on the schedule in europe this coming week. first, the corporate agenda where the retail sector will be the center after tension. castle may say profit dropped in the first half. it―carrefour may say profit dropped in the first half. europe’s largest nonfood retailer may say first half profit dropped as it sold businesses as part of a shift into the luxury goods industry. laurel, the world’s biggest cosmetics company is expected to say first half profit increased as it expanded in china, russia and other emerging markets . in the u.k. the drinks industry dominates the corporate agenda. the world’s largest liquor maker diageo is expected to say earnings this year barely grew because of restructuring costs and the dollar’s decline against the pound. another maker may say slower demand outside the u.s. is continuing to hamper earnings. j.d. weatherspoon, which owns more than 640 british pubs, may say full-year earnings were hurt by a sales downturn during the you’re yore 2004 soccer tournament. group has a no television policy. but most―at most of its outlets. investors may have a clearer picture of the effect record oil prices having on the economy. august data for european manufacturing and services will probably show high energy costs are being felt across the board. investors expect the e.c.b. to leave rates unchanged to allow a recovery to take hold. the e.c.b. will release growth and inflation forecasts for the euro area on wednesday. consumer credit figures from the u.k. combined with the nationwide house price numbers.

>> for a preview now of next week’s market action for the tokyo and asian region, our tokyo bureau.

>> expect foigs show japanese industrial production rose in july as companies increased output to meet greater overseas and domestic demand. economists surveyed expect a rise of 1%. that report out on tuesday. also next week, japanese retail sales probably rose 0.7% year on year. those figures are out monday. the philippines releases g.d.p. figures this week. economic growth probably flow slowed in the second quarter. economists surveyed say g.d.p. probably rose .5% from the previous three months. two days later australia releases its g.d.p. results for the second quarter. economic growth probably accelerated as consumer spending surged due in part to more than $2 billion australian worth of government handouts.

　

and economists we surveyed say gross domestic product probably rose .9%. on the earnings front, taiwan’s may say profit rose. the biggest electronics company by sales will probably post net income of 6.2 billion. the company is expected to report early in the week. and finally, malaysia’s largest lender may post its biggest profit in seven years on expanding economy and record-low interest rates boost being credit demand and helping the lender cut bad loan costs. net income probably rose 26% to 2.4 billion ringet. and that’s what’s expected in the week ahead in the asia pacific region. now back to you.

>> well, the pace of g.d.b. growth has slowed. but many chief executives expect the economic expansion to continue. one of them is wayland hicks.

>> if you look at our market , the our principle in market is private and residential construction. over the last three and a half years that has been down 35%. during first six months of the year it’s been up 2%. we’re seeing a gradual recovery. i think that’s the direction the economy is moving in.

>> united rentals customers include construction and industrial firms, utilities as well as homeowners. mr. hicks says growth is fairly evenly divided across those groups. although demand for office construction in the bay area, he said, remains weak. and for the rise in oil prices, customers will have to bare some of that burden.

>> we spent about $25 million during the first half of the year on oil-related petroleum products. that’s been up about 12%. we absorb about half of that. and we pass through about half of that to our customers.

>> shares in the united rentals are up over 5% this year. they close just down one penny or finishing at the $20.39 for friday’s trade. when we come back after the break, golf’s most watched event will no longer be commercial-free. we’ll have more on that story when we return with our money and sports segments. it’s one of the most popular segments we do each week.

在线播报
Listen Market briefing --- Bob (fast)
Tyco --- Allan (slow)
>> welcome back to “world financial report.” we had green arrows across the board with the dow up. s&p 500 up about.25%. and the nasdaq up about .5%. a check on u.s. treasuries. they fell. the 10-year note falling on the order of 5/32. the five-year fell 3/32, yield at 3.43% and the two-year unchanged, yield at 2.48%. in currency trading on the day we see the yen finishing at 109.68. and the euro.1.2011. it was about two years ago edward breen took over as the new chairman and c.e.o. of tyco, battered by scandal and a criminal trial of both its former chief executive and chief financial officers. our alan dods frank tells us how breen is now turning tyco around.

>> when the now disgraced c.e.o. dennises could loss can i ran tyco, he built the diversified company in health care, electronics and fire and security. he did it by spending $64 billion for hundreds of acquisitions while running up $23 billion in debt. now two years after taking over, tyco’s c.e.o. edward breen has lowered debt by $10 billion and is selling 60 business units. he’s gotten the stock up from $8.25 a share to around $32 a share.

>> it’s taken dramatic steps at changing management, changing their business strategy and their operating plan. and that’s led to significant free cash flow generation, debt reduction and obviously they’ve been able to calm and appease the capital markets . >> in it an interview with bloomberg news, breen said he expects to save $3 billion by 2006 by sharpening operations, including implementing the first company-wide purchasing system for commodities and travel services. breen now expects free cash flow this year of $4.7 billion for the world’s largest maker of electronic connectors, plastic hangers, industrial valves and security and fire systems.

>> what’s probably going to happen at the end of this year is the company will increase its dividend which will employ some of that cash. secondly, they could very well do a stock buyback.

>> fund manager bought around eight million shares in the months after breen took over. he still holds more than four million tyco shares after selling half his holdings once the stock had more than doubled.

>> people just didn’t know whether the company was a survivor. we’re at the point where we know they’re really very good businesses in the company.

>> breen says tyco is off the acquisition trail for now and in the face of profit margins being pressured by increased costs for commodities and energy breen is being conservative. for example, next year he’s budgeting for oil at $40 a barrel. bloomberg news, new york.

>> edward breen’s ded debt reduction plans has gone pay off in june, moody’s raised the long-term debt rating to the lowest investment grade. a week earlier standard & poor’s lifted its rating to bbb. two levels above junk status. tyco shares on the day on friday down 12 cents for a third of 1%. u.s. auto sales probably fell slightly in august as new incentives failed to attract briers and consumer spending fell faster than expected. automakers are set to report results next wednesday. auto sales this month will likely end at an annualized rate. it’s less than the 17.3 million rate last month and the 18.4 million analyzed rate for the same time last year.

>> there were weather issues. you still have some overhang with fuel prices, with the economy being considered maybe a little bit sluggish as far as the recovery goes at this point. so you really don’t have all the factors lined up just the way the industry would want them right now. i think that’s weighing on it a little bit.

>> goldman sachs auto analyst wrote in a report that he believes “weaker sales are the result of a consumer spending environment which has deteriorated more rapidly than expected.” auto makers are trying to lure customers with incentives and rebates. incentives rose 5% this month from july at general motors and chrysler and almost 1% at ford. ford still expects to post lower sales this month because labor day weekend falls entirely in september and there is a drop in demand after hurricane charley. chrysler chief executive officer said some early returns in august were slower than july but remains optimistic that august will be a decent month. a decline in august sales would be only the second year-over-year decline this year. a surge in home equitiy loans catapulted countrywide financial to the top spot among underwriters. countrywide grabbed about 17% of the market for these loans. the largest u.s. mortgage lender outpaced r.b.s. greenwitch, royal bank of scotland and morgan stanley in asset-backed securities underwriting. well, freddie mac has asked the boards to reconsider a rule that could force it to cut its profits. the rule would force companies to recognize losses in certain debt securities if officials failed to prove they will not be sold under values―until values rebound or they mature. the rule would also force fred irmac, the second biggest source of u.s. funds to cut the vam you’ve most of its portfolio of mortgage securities because of swings in interest rates. the financial accounting standards board says it is “ongoing discussions about the rule.” when we come back, we will get previews of next week’s market action in europe and the pacific rim.

The slowing economic momentum --- Paul
>> second quarter g.d.p. numbers were revised downward. earlier, the slowing economic momentum.

>> it’s not a recession. but we think that the economy needs to grow around 3.5% annual rate just to keep up with productivity growth and growth in the labor force. so this is actually the economy that’s going backwards a little bit in terms of the things that matter. for about three months there we thought we had a real boom underway. it’s not there anymore. we’re now down to the best growth in four years and falling.

>> they also say the other point is that it is just a couple of months, that maybe it is a pause as chairman greenspan has called it and nothing more than that.

>> that’s probably true. i think most people, even people who don’t think that the policies are very good, think that the next job report will be better than the last one and the next g.d.p. report will be better than the last one. but we still have an economy that’s way down from where it ought to be. we ought to be having 4579% or 5% growth. we’re not doing that.

>> some will say 3% is not that bad, 3579% still not that bad. we’re still doing so much better than so many of our other industrialized nations, if you will. that it’s really just not as bad as everyone would steam think that it is. there are still a million jobs that have been created in the last year.

>> but remember, the economy needs something like at least 1.5 million a jobs a year just to keep up. just to prevent the labor market from deteriorating. and we’re way, way down. we’re 1.2 million jobs below where we were at the last peak. and the population’s grown. we should have five or six million jobs more than we now do. we’re―actually, we’re losing. we’re not keeping up. if you’re look at profits, it’s not bad. if you’re look at g.d.p., it’s not bad. if you’re looking at jobs and wages, it’s pretty lousy.

>> do you think the chairman should not have raised rates?

>> i think he should not. i think this was a mistake. they bought into the story of a self-sustaining recovery too early. i understand the last one they were afraid to not have raised rates because it would have looked like panic. i think they made a mistake.

>> the argument says even though they are raising rates, they’re only bringing them back down to―getting them away from recession level rates. you’re only bringing them back up to neutral level

>> yeah. but we still have recession level labor market problems. unemployment number is the only number that looks good. everything else looks like an economy with 7% employment. this is not a happy economy. we don’t have the recovery that would say it’s time to remove the stimulus.

>> we’ve got the convention coming our way in the next couple of days what do you think we’re going to expect to hear from the republicans?

>> well, they say they have to come up with something. they can’t just say look at our record, everything worked. the numbers aren’t that good. the feel isn’t that good. everything we know says it’s going to be ownership society stuff. most of the ownership society stuff―a lot of time savings skts small change. maybe they can dress it up to look like it’s bigger. maybe people won’t realize it doesn’t help middle class families much. but big item i’m almost sure is social security privatization. it’s going go back to 2000 when he talked about private accounts. the trouble with the ridge me tick it didn’t work. which is why it didn’t happen. maybe he can roll it out again and hope people don’t notice that they can once again be fooled by not understanding the aremetic.

>> what about the deficit? the bush administration says they’ll be cutting it in half over the next five years.

>> it’s a hillarious forecast. the key elements in that are tax cuts expiring even though the bush administration is campaigning to have them made permanent. and ignoring alternative minimum tax reform which the administration is campaigning for. so the deficit will fall a lot if congress doesn’t give us what we want. and that’s our plan. it’s an amazing joke.

>> does kerry present a better alternative?

>> kerry is doing not a lot about deficit reduction. he’s not proposing additional things that will widen the deficit. and he’s proposing some corporate tax reform which should help a bit. but kerry―his main thing is to roll back part of the tax but to use it for health care so he’s not ache deficit hawk. some democrats are disappointed. others say, look, the public doesn’t understand the deficit’s very much. he’s got to offer something fozz people.

>> once again, paul krugman speaking with our suzy assaad. his most recent book, the great unraveling is in paper back. confidence among u.s. con seemers fell. the final reading on august consumer sentiment dropped to 95.9 in august. marketing the first decline since may. however, the readings still came in higher than the initial estimate of a drop to 94. the university attributed the decline to concern about the pace of employment growth. employers plan to cut health care benefits to slow the rise in their insurance costs next year to 9.6%. that’s the finding of a preliminary survey of more than 900 u.s. employers by mercer human resource consulting. health insurance premiums have risen 39% over the past three years. last year’s jump was the biggest since 1990, according to the henry kaiser foundation. families have been cope big cutting benefits and shifting costs to workers. new york city is gearing up for the convention. delegates, journalists and protesters. we’ll have a preview of what might happen when we come back.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
Crude oil --- Greg (slow)
>> welcome to “world financial report.” the economy grew in the second quarter. that topped consensus estimates but was down from the previous forecast. economists were expecting the figure to be scaled back from the second quarter growth figure of 3% largely because of high oil prices and the impact that had on trade in the second quarter. the headline number of 2.8% was just above the bloomberg survey forecast of 2.7% and followed the 4.5% pace of growth in the first quarter of the year. treasury secretaryy john snow described second quarter numbers as a pause.

>> we did see a pause. in the second quarter. we still see the underlying strength in the economy. low inflation, high productivity. unemployment rate falling. and continuing pickup on jobs.

>> considering that oil prices had moved so much higher in the second quarter from the first, many economists were satisfied with the numbers.

>> i think that a couple weeks ago starting to talk completely the opposite of the few months earlier about a serious downturn in the economy is greatly exaggerated. the u.s. economy is absorbing some fairly significant issues here with the energy supply shock and these prices. and i think that we’re growing at least at a trend pace. >> next week we’ll get some new monthly data on monday. we’ll get some personal income figures for july. and then friday, a week from today, brings the august jobs report. stocks advanced on the day. oil prices may have brought the market down too much. let’s get to the numbers. we see green arrows across the board. the dow up about .2 of one percent. and the nasdaq composite up about .5% on the friday trading. volume at the big board. the lightest volume of the year, 850 million shares traded. advancers beating decliners. nasdaq just over a billion shares traded. and there also advancers beat decliners. the nyse composite index up .2%. the amex up .6%. and the russell 2000, the best of the group so far, up .8% in friday’s trading. the broadest look of the u.s. markets , the dow jones up 1/3 of 1% on the day. oftentimes when stocks rally treasuries fall. that was the case on friday. treasuries fell for the first day in four on the economic data.the 10-year note down. the yield up to 4.23%. five-year fell 3/32. the two-year, we see it fell 1/32 and the yield at 2.49%. for more on today’s trading action we now go to our julie hyman coming to us from the big board.

>> the s&p 500 and dow both rising in today’s session capping off a week of gains. the s&p 500 up about .9 where as the dow gained about .8. it was the third straight week of gains for both indices. that said, very low volume this weekend. low volume today in particular. it was about 800 million shares traded, the lowest volume of the year. and the first time this year that we’ve traded fewer than one billion shares. in today’s session it was the semiconductor shares that did the best, best performing group wise. they had declined in yesterday’s session but rebounding today. advanced micro devices, national semiconductor, some of the best performers there. pharmaceuticals doing well in today’s session. the second best gainers within the s&p 500 there. it was bristol-myers squib. king farm suitals wells watson pharma doing well. we did have one group dragging within the s&p 500. the airlines were declining in today’s session. this was after american airlines said its 2004 cost projection will be $1 combl higher than last year because of rising prices. and, indeed, higher than its own previous forecast. this sent down the other airlines stocks as well. some index changes within the s&p. coach will be replacing charter one financial in the s&p 500. and in turn, urban outfitters will take coach’s place in the mid cap 400’s. we’ll be watching those to take effect after the close of trading on tuesday. i’m julie hyman with bloomberg news from the new york stock exchange.

>> thank you. the nasdaq also finished the week higher. our june grasso has details from the nasdaq market site.

>> semiconductor equipment makers gained after their drog yesterday. some of the leaders, novellus, which did not lower its profit forecast as some investors had expected. novellus whose equipment built circuits and computer chips said third quarter revenue will be $412 million in keeping with its forecast range. also leading k.l.a. and applied materials after jefferson company raised its rating on the stocks. k.l.a., the largest maker of inspection equipment for chips, was upgraded to buy from hold. and deutsche banc also initiated coverage on the stwock a buy rating. applied materials, the world’s biggest maker of semiconductor production equipment was raised to underperform from hold by jeffries. tech data, the number two distributor of computers and related parts increased after reporting better-than-expected profit and revenue. the company said it second quarter net income of 52 cents a share on revenue of $4.58 billion. the average analyst estimate was 49 cents a share. one of the worst performing tech stocks after the company cut its 2005 sales estimates from the second quarter from $70 million from a previous forecast of delb 70 million to $82 million. it also withdrew its 2005 profit forecast. j.p. morgan securities cut this stock from knew the trool overweight. a maker of digital video recorders that can pause and replay live television, tivo, said it expects revenue this quarter from about $27 million to $28 million. the average analyst estimate was $29.5 million. june grasso, bloomberg news at the nasdaq marketsite.

>> concern about oil supply disruption because of political unrest are easing. iraqi oil exports from the persian gulf were close to their normal levels in oil ministry official said. and convenient zaillian exports remained steady since president chavez’s victory in a referendum recall vote. crude oil set new highs as it rallied back in the first three weeks of august. but since peaking at just below $50 a barrel the futures dropped below where they started the month. expectations are oil prices will fall further.

>> with the decline in oil prices in the past week, it’s been dramatic. only by up to 13% at one point. by $6 a barrel. traders and analysts say prices could fall further over the next week, according to a sure have a by bloomberg news. analysts and traders say prices will decline. 43% say they will rise. 7% are neutral. a week ago only 24% of those surveyed said oil prices would fall. now treasury secretary john snow echoed those sentments today telling business leaders in michigan saudi arabia is willing to raise output to 10.5 million barrels per day.

>> the fact that the supply is there. with it not a huge cushion but enough cushion on current demand levels makes me think that these prices can’t be sustainable.

>> with the optimism driven by several factors. yukos oil of russia said it will increase shipments this year though at a slower pace. also iraq raised oil exports. and the u.s. reached a peace accord with shiite leaders in iraq reducing the threat to oil facilities there. even with these price declines, oil is still selling at historic highs. 38% higher a year ago. david briggs says that reality doesn’t bother many stock investors at all. in fact, briggs says the stock market ‘s toleration for high oil prices is higher than a year ago. today he says oil prices could range from $36 to $42 a barrel and stocks will still perform well. back to you.

>> thank you. in friday trading nynex crude oil futures were little changed. alan greenspan says time is running out for the u.s. to make what he calls increasingly stark choices as baby boomers retire. the fed chairman says retirement benefits under social security and medicare may be more generous than the u.s. economy is fund. he says changes must be made before the baby boom generation retires.“if we delay, the adjustments coob bankrupt and painful” greenspan told a central bank conference in jackson hole, wyoming. after break, the u.s. grew at 2.8% annual rate last quarter. up next, the outlook for economic growth in the united states.

G.D.P.
>> the state of the u.s. housing market is one focus of economic reports coming out this week am we’ll get the july figure on home resales tomorrow morning from the national association of realtors. economist natural bloomberg survey expect they fell from the record pace set in june. on wednesday, look for the government’s report on sales of new homes. they likely showed―slowed, i should say, for a second straight month. that same day, the labor department will report on durable goods orders for last month. our survey suggests that they rose for a second month in a row. thursday we get the initial jobless claims data for the week. our survey suggests unemployment lines got a little longer, as you see there. friday, watch for a revise the government customer of second quarter economic growth. economists expect it to be down .3 of a point from the original 3% estimate. plus, friday we’ll bring the university of michigan’s final measure of consumer sentiment for the month of august. our survey suggests no change from the preliminary reading of 94.0. well, the u.s. budget deficit is expected to reach a record $445 billion this fiscal year, and neither president bush nor his democratic challenger, senator john kerry, are presenting ways to tackle it. yet how the government handles its money is becoming a more popular topic, at least judging by a new book by blackstone group chairman pete peterson much his book, “running on empty,” is number 11 on the “new york times” bestseller list. the republican echoing democrats, like robert rubin, says the growing deficit will eventually lead to higher interest rates, less u.s. investment, and a falling dollar. still, president bush and senator kerry said at recent campaign stops that they would not ask americans to make sacrifices that would cut the deficit.

>> i will never privatize social security. i will not cut the benefits. and i will not raise the retirement age in this country. period.

>> we don’t need to be raising taxes on the american people right now. these taxes ought to be low to keep the economy growing.

>> a bipartisan budget watch dog group says neither candidate has a credible plan for reducing the deficit.

>> president bush wants to make the task cuts permanent. senator kerry has mentioned a health care initiative. these are very expensive items that make it unlike that will you’re going to be able to achieve the goal of having the deficit in five years.

>> so what do voters say on this issue of the deficit? well, a pew research poll shows 1% of likely voters think the budget deficit is important compared to 7% in past elections. in terms of the numbers, some economists say the sheer size is not the right way to measure the deficit. at 3.8% of the nation’s go ahead go ahead, that’s where we’re at right now, 3.8% of g.d.p. it’s viewed well below the 5% level from the mid 1980’s. but with new spending on wars in iraq and afghanistan, the cost of homeland security also, some economists forecast that percentage will rise.

>> goldman sachs, the concord coalition, our own numbers, they’re all suggesting budget deficits of 3% to 4% of g.d.p. as far as you can see over the next decade, and then the situation gets much worse. in other words, the next decade is the good part.

>> he says that when even more baby boomers start to retire, collecting social security and medicare checks may eat up more than 10% of g.d.p. well, in world and national news

在线播报
Listen Market briefing --- Matt (fast)
welcome to “world financial report.” i am matt nesto. let’s talk about oil today. it fell in new york trade for a third session, dropping as low as $44.75 a barrel. look at that, folks. up a nickel. worries about oil supply disruptions in iraq and elsewhere helped push oil prices close to $50 a barrel last friday. local shipping agents say that oil flows to iraq’s persian gulf terminals have doubled from a week ago. iraq is shipping oil from its northern oil fields into turkey. analysts are waiting for tomorrow’s weekly inventory report from the energy department. seven of the analysts surveyed by bloomberg expect a decline. six say supplies increase. one says no change at all. cord to get median of those estimates, supplies probably declined by 250,000 barrels. that’s little change on 293 million barrel base. oil prices have rallied this year as expanding economies boosted demand in the u.s. and china.

>> we just keep on consuming more and more gasoline. we’re not doing anything about creating alternative sources. we’re not doing anything about conservation. we need an energy policy desperately. the chinese have an energy poll seufplt they are building nuclear power plants, bringing in liquid natural gas, building more coal-fired generating plants. we’re not doing any of that.

>> he says the fact if oil reached $50 a barrel, it would represent a threat to the global economic boom. if we look at other energy markets today, they were mixed, little changed on the session. let’s talk about the bonds. they were up here today. the stocks were mixed. the dow and s&p both higher here today. dow up a quarter of a percent. s&p little changed, finishing up off earlier highs from the opening bell. if you look at nasdaq, it finished down .1%. volume again light for the second day. not even 1.1 billion shares at the big board. if we look at bonds, well, as i said, bonds were up here today. i can give you the bonds, guys. there you go. you can see the 10-year bonds, yield is going to give you a yield of 4.28%. similar move on the five-year. up.

Oil prices --- John Fellmy --- Chief Economist --- American Petroleum Institute
>> welcome back. high oil prices may begin to slow economic growth earlier, erin burnett spoke with john fellmy, chief economist for the american petroleum institute, about his forecast and where oil prices are likely headed.

>> it’s going to come down to what happens with supply. iraq, venezuela, and nigeria, even norway, and then what happens with demand. we’re seeing very strong demand coming out of areas like china, so it’s going to be a function of all those factors.

>> now, a couple of issues within that, and you’re talking about growth in demand from china. recently opec has boosted its expectation in terms of oil demand in the quarter, but at the same time, we’ve been hearing that global growth expectations are actually being cut back. explain to me how that works.

>> well, because of higher oil prices, we’re seeing a drag on world economies. in the u.s., for example, probably 2/3 of the slowdown in the economy has been a function of higher oil and natural gas prices. so oil and energy really do adversely affect the economy when they grow up.

>> so, as oil prices rise and the economy slows, why are demand forecasts for oil at the same time rising?

>> because even with the higher oil prices, we’re still seeing net positive economic growth. here in the united states, we’ve got such a stimulative fiscal policy and positive monetary policy.

>> so in terms of your forecasts for oil prices, what is the recession point? i mean, that’s the big talk on wall street right now, whether we’re going to have a recession or not due to these oil prices. what are your internal numbers say? is there any sort of a threshold oil price at which the energy industry believes that a recession is high risk? >> well, if you look at historical patterns, we probably have to see oil prices go up well over $80 a barrel before you would offset the stimulus that we’re experiencing right now from fiscal and monetary policy.

>> so you’re saying we can sustain these prices, anything up to $85 a barrel without you being concerned that a recession is going to be the byproduct.

>> well, as an economist, we’re always concerned about recession, but at this point we’ve got such powerful stimulus and such strong economic growth that it hasn’t been offset by the higher oil prices.

>> want to talk to you about one or thing, because at the top you mentioned supply and demand and how that was really going to be the―what was going to drive oil prices. but there’s another issue in here, and that’s the issue of capacity. i mean, there could be plenty of supply in the ground, but people say there just hasn’t been the investment in getting that oil out of the ground, and that’s really what is causing the problem right now. what do you think of that?

>> well, we had lower levels of investment in 1999, 2000, 2001 as a result of lower oil prices. now we’re seeing substantial investments, most estimates are we’re investing over $50 billion a year in the united states.

>> do you think we’re going to get a ramp up from some of the companies that you represent, exxonmobil, chevron? is this long-term higher oil trend in prices going to encourage them to increase their exploration and production budget? >> there’s no question that higher oil prices will stimulate increased investment. so we’ll have to see.

>> how much do you think is needed in terms of that investment, say, over the next decade? i mean, i know some economists at goldman sachs are saying we need $2.4 trillion of money invested in exploration and production over the next decade. do you think that that sort of number is right, or is that off base?

>> oh, i think it’s clearly in that ballpark. i think that we could clearly see more investment in that order.

>> that was john fellmy, chief economist of the american petroleum institute, speaking with our erin burnett. well, toys r us shares closed higher on the day. the world’s largest toy store chain reported a second quarter profit of $61 million after a tax gain compared to a loss a year ago. year to date, shares are up 27%. overall, revenue fell 4%, and countries crew john eiler described the second quarter as “very challenging” for the toy industry. toys r us had $147 million in markdowns to liquidate inventory. up until 1998, it was the leading toy store until wal-mart took over that role. and the company was able to sell more low-priced items back then, forcing toys r us to cut prices.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Wal-mart --- Su (fast)
>> welcome to “world financial report.” i’m bob bowdon. oil prices fell today off a record high on friday intraday after iraq boosted shipments to tankers to normal rates for the first time in two weeks. on the day, we saw crude oil closing at $46.07 a barrel, up just two cents on the day. futures also fell on concern that current oil prices will hurt demand. this month alone, prices have hit record highs 14 of the past 15 trading sessions. ed silliere, vice president of risk management at energy merchant in new york says speculators are not the only ones driving oil prices higher.

>> weave had a real surge in new players in this business, and that’s coming from the stock side. those who are the big portfolio managers who are concerned about stock prices going lower due to high i’m prices have come in and started hedging in the oil market .

>> supply concerns have helped fuel the rise, especially in iraq. fighting in the southern region has kept the lid on some exports there. meanwhile, russia’s biggest oil company cut its production target for the year. yukos now expects output at just 1.7 million barrels of crude a day, down from 1.8 million. yukos says the company’s tax bill is forcing it to spend less on drilling and maintaining wells. among the other energy movers of the day, gasoline, new york unleaded gasoline, up see there, down just .08%, you see there $125 a gallon. heating up up fractionally, as was natural gas futures. u.s. energy expense spencer abraham will meet with the head of the international energy agency in paris tomorrow at 10:00 a.m. paris time, 4:00 a.m. new york time, to discuss prices. the i.e.a. advised 26 oil-consuming companies and coordinates the use of government oil reserves to avert shortages. the bush administration policy is not to tap into the u.s. strategic oil reserves to lower prices. el paso says it will record $3.7 billion in pretax costs. that’s as it restates results dating all the way back to 1999 to correct improper booking of oil and natural gas reserves and also accounting errors. the nation’s largest pipeline company already signaled the restatements, which include $2.7 billion for a cut to el paso’s oil and natural gas reserves. the company is reviewing its accounting for past periods before publishing the belated 2003 results. they are asked―they are slated for the he happened of september. well, let’s get to the closing numbers on this monday afternoon. the dow jones industrial average finished lower to the tune of 37 points, or about .4%. you see there, finishing at 10,073. s&p 500 down a quarter of 1% at 1095. and the nasdaq was essentially unchanged on the day. the big board came in at 1.2 billion shares traded, as we indicated, the weakest trading day so far this year. you see decliners beating advancers by close to a 2-1 margin. over at the nasdaq, volume at 1.23 billion shares we’ll call it with decliners outpacing advancers, but not quite by the ratio we saw at the big board. checking other major market averages, we see red arrows across the board. the nyse composite down half a percent, amex composite also down half a percent, and the russell 2000, a measure of small cap stocks, down .8%. the broadest look at the u.s. markets is seen with that chart. the dow jones wilshire 5000 down about 1/3 of 1% on the day. treasuries decline as a decline in oil prices reduce speculation economic growth will slow. we saw treasuries, the 10-year, trade off 13/32 on the day, yield up to 4.28%. and the five-year down 7/32. checking the two-year treasury, that was down just 2/32 on the day, yield up to 2.47%. well, trading volume at the new york stock exchange, as we just indicated, amounted to just over a billion shares. that’s well below the average for the year. for more on today’s trading action, we bring in julie hyman at the big board.

>> lowest trading volume of the year today on the new york stock exchange, and traders are telling me that it might get worse as the week goes on as a lot of investors are on vacation, and also as people get out of town ahead of the republican national convention. that said, however, we did have a declining market today, mixed for much of the session, then really extending declines as we got toward the close. energy stocks helping lead the decline today, as we saw the price of oil come down off its highs. some of the biggest losers within that group, apache, as well as burlington republican sources. on the other hand, however, reflecting the mix the market that we saw for much of the day, semiconductors did well in today’s session, extending some of the advance that they had experienced last week. so some of the biggest gainers there, l.s.i. logic, broadcom, advanceded microdevices, as well as nvidia. some of the other groups, employment services. robert hath international was downgraded over at u.b.s. the analyst said this company had experienced a boost in consulting business related to the sarbanes-oxley act and more financial regulation. they said that that business is now falling off. man power, kelly services, con ferry international, and labor ready. also moving on an analyst, e.d.s. was raised over at sanford bernstein. the analyst said there was concern among investors that the company had some trouble signing navy contracts. they said now the company’s getting over that hurdle, and those shares also rising in today’s session today, along with other information technology stocks. back over to you.

>> thank you, julie hyman. well, more details now on the biggest drag on the broader market , shares of wal-mart, the a time when retailers are counting on back to school sales to boost earnings, the world’s biggest discount chain says that august sales were weaker than expected. and bloomberg’s su keenan joins me now with more on the wal-mart storyment

>> as you know, wall mart a benchmark for the retailers, so a lot of attention being paid here. wal-mart now cutting its august sales forecasts and giving two key reasons. it says sales were hurt by hurricane charley and, more importantly for the retailing sector, demand for back to school products, it says, has been sluggish. the company says the hurricane forced 75 stores to close temporarily and hurt sales at 200 locations in florida. the world’s largest discounter also said school-related items, note books and jeans, were selling less than expected, this at a time of higher gasoline prices and slow job growth. analysts say wal-mart sales are sensitive to both because a large percentage of its customers include or are low-income families. wal-mart says august sales will be unchanged, 2% higher, a change from the previous forecast for a gain of as much as 4% and it would represent the smallest gain in 17 months. wal-mart shares initially fell as much as 2.5% on the news before regaining some of that lost by the close. morgan keegan’s john lauren says when the number one retailer says demand isn’t there, he expects demand to pick up soon.

>> how much does gas prices have to do with it, it’s tough to tell. but the key is let’s watch and see the numbers after labor day and get those sales trends a couple of weeks into september. the calendar is a little going against this year, labor day being a shift, shifting out a little bit, but once again, consumers are not buying until it’s really time of need.

>> and lawrence says the time for wal-mart is in the next three months. that’s when it needs to see demand pick up. an analyst at rockefeller & company, whose $4 billion in assets include wal-mart shares, he says, “your average american consumer is not as robust as wal-mart thought they would be two months ago.” now, among the traditional back to school products that wal-mart says is still selling, uniforms and athletic shoes. the company also says in addition to the later than usual labor day, there are fewer clearance items and the absence of child care credit checks boosted sales last year. all this is making a difference. kohl’s fell more than 1%. shares of target initially as much as 2.5% lower before rebounding in afternoon trading. costco shares fell 1.3%, and they are up 13% year to date. that’s the wrap on the retail end. bob?

>> thank you, su keenan. appreciate that report. well, shares of fedex soared on the day. there’s one stock that rallied. that’s after the nation’s second biggest package carrier raised its 2005 profit forecast for a second time, saying it will boost capital spending by about 1/3 as shipping demand surges. the company does not expect rising oil prices to cut into demand. fedex and u.p.s. both pass on higher fuel costs with surcharges. fedex increased the forecast to between $4.40 and $4.60 a share for the fiscal year ending may. it also expects to earn $1.to $1.10 in the share in the first quarter, more than double from a year ago. fedex also said it will increase investment in equipment and facility to as much as $2 billion, a 31% increase from the company’s original investment plan. when we come back―rising energy costs may slow global growth. we’ll get a forecast from the chief economist of the american petroleum institute. that comes up right after a commercial break. stay with us.

Coal stock --- John Bridges
>> welcome back. with crude oil prices up 55% in the last 12 months, some investors have begun to take a look at other forms of energy which may have become more attractive in comparison to crude. take a look at one company. peabody energy, largest u.s. coal producer. share vs. rallied 74% in the last 12 months. second quarter sales were up by a third from the year before. console energy reported second quarter profrts that more than doubled from the year ago. its stock is up 74% as you can see in the last year. joining me with more on the prospects for coal in the light of record oil prices is john bridges. he follows peabody and console. comes to us from his company’s trading floor. thank you for being on the program. give us a sense of whether coal is a more―whether coal stocks are a more attractive investment in light of higher oil prices.

>> oil has a function here but the biggest drivers of this move we have seen in coal has been the really tight coal market within the u.s. what has happened is coal reserves have fallen in the east particularly in west virginia, permitting difficulties of limited access to the reserves that remain. and then the booming chinese economy, in particular demand for coal for steel manufacturers has siphoned off a portion of coal that would otherwise come into the market . that has pushed prices up. so the immediate driver really hasn’t been oil. it’s helped but it is primary a really tight u.s. supply situation.

>> i want to bring our viewers a look into the bloomberg terminal. john, i know you can’t see it. i will explain what i’m showing. you know the numbers quite well. very have three lines on the chart. i want to draw attention to the% pright side. the last if you months. we have the yellow line which is right here. that is crude oil prices that you see moving much higher, up to nearly $47 or more than $47 a barrel in the last couple of months. the white line here we have is coal prices, also moving up precipitously from around $50 to around $60 in the last couple of months. meanwhile, the red line moving down is natural gas. john, isn’t it the case that coal competes mostly with natural gas in terms of electricity production for u.s. utilities and with natural gas getting cheaper and coal getting more, that seems to be a win for coal stocks, right?

>> yes. the correlation is not directly between oil and coal. the correlation is indirectly oil competes with distolate.

>> if electric utility is going to burn something to make electricity for people’s homes, it will usually be natural gas or coal. we have natural gas prices moving down and coal prices moving up. if you are a coal producer, what does that mean?

>> i think the key thing is that gas is coming down but off a very high level. there was something like a break even when the gas price was $3. we now have a situation where it’s come down to $5. it’s still very expensive in terms of the cost of generating fuel and better to use coal.

>> to extend our conversation, we turn to alternative energy sources like fuel cells, wind and solar energy. i bring in a fuel cell stock. they develop fuel cells for large commercial buildings. they create electricity from natural gas or hydrogen without the efficiency losses that come from a mechanical turbine. fuel cell shares in the last six consecutive sessions have been up all six of the sessions amid repeat record oil prices and up 21% in the last six sessions, up 17% in five sessions. joining me with more on alternative energy investments is an analyst with adams, harkness, hill. you give perspective on higher oil prices and what does that mean for companies like fuel cells.

>> high oil price vs. boded well for the fuel cell guys. these are the development stage companies that are developing technologies now that can be used in the years to come for supplying our energy security or on a distributed generation model where companies and individuals want to produce their own electricity on site, whether a natural gas feed, a coal feed, whether that’s a gas or in some cases oil itself. folks are looking for security around their power supply, depending on their business.

>> the problem with some of the stocks in the past, people say it is not economical to pursue modern technologies like fuel cells, it’s too expensive. what you are saying is if oil becomes so much more expensive, maybe these technologies have a chance. that is why the stock is running up. is that it

>> it is partly that. also there is a risk premium for the cost of oil. we see manufacturing. we’d like to see adoption pick up. we see that especially in fuel cell energy with contract wins announced recently. partly a manufacturing story getting this technology in the hands of industrial users and having them comfortable with it. that’s a big portion of the story to see these take hold. so we see it more in that light.

>> well, we have a break coming up. i’d like to ask both of you to stick around through the break. we’ll continue this discussion with high oil prices and the effect on alternative energy sources when we come back after a commercial.

在线播报
Listen Market briefing --- Bob (fast)
Corporate earnings --- Greg (slow)
NYSE --- Julie (slow)
welcome to “world financial report.” i’m bob bowdon. the oil markets dominated investors’ attention today. crude oil prices fell in new york trading after a standoff in the iraqi city of najaf ended peacefully. prices hit $49.47 early in the session. let’s get a check of how the energy markets finished the week. down off the absolute highs. finishing at $47.86 a barrel. crude oil for september delivery shown on the chart. oil prices managed to gain nearly 6% for the week. gasoline for september delivery slipped nearly 6% in the last five trading sessions. gas prices fell 4% today alone as traders speculated the u.s. has ample fuel supplies for the remainder of the summer travel season. heating oil for september delivery gained 1.25% on the week as indicated by that chart. downward move on friday. in the natural gas futures pit, you see on a one-week basis, a gain of .3%. not as dramatic for natural gas at $5.55 per million b.t.u. gold prices in new york rose 3.5% on the week, most in five months. traders speculating that surging energy costs will slow economic% -pgrowth. that may boost gold’s allure as% pa hedge against declines in other srefpls. well, to give you some perspective on how far oil prices have risen, take a look at this. light sweet crude stayed above $35 a barrel every day since april 6 of this year. that’s a duration of 136 days. oil above $40 a barrel since july 13 or 38 days. much of the climb comes from unusually tight inventories around the world magnified by violence in iraq and questions about supplies from the russian company yukos. we thought we’d take a look back at oil markets in 1990’s, comparing current prices after iraq invaded kuwait and shortly before the first gulf war with those we are seeing now. crude oil in 1990 remained above $35 a barrel for 29 days and closed above $40 a barrel for just two days. those levels are unadjusted for inflation. in today’s dollar, $35 a barrel for oil in 1990 would equal close to $50 today, $40 back then translates to $57 a barrel today. well, concerns about slowing economic growth, record high oil prices and other factors are prompting many on wall street to trim third quarter profit estimates for dozens of u.s. companies. c.e.o.’s are doing the same. so far in the third quarter, the number of companies lowering forecasts is 439. that’s 32% higher than the same period during the previous quarter. here’s bloomberg’s greg miles with this report.

>> corporate earnings will probably rise by around 15% in the third quarter, healthy by most standards. sectors such as basic materials and industrials posting strong gains. yet that pace will be slowest in the last five quarters. many analysts are beginning to shave profit forecasts for some companies in the transportation, industrial, consumer and technology sectors. one concern is oil prices which have risen by more than $10 a barrel or 26% since july 1.

>> earnings are facing several head winds, facing higher energy prices, facing decelerating economy, they’re facing growing geopolitical concerns and they’re facing tougher year over year comparisons. the third quarter and fourth quarter will be much tougher than in the first and second quarters.

>> a number of developments are making wall street and c.e.o.’s more cautious. some strategists say higher oil prices and interest rates are curving consumers’ buying power and also boosting costs also for many companies. manufacturers are also being hurt by rising costs for steel, rubber and shipping. in the consumer decision cessionarys, analyst vs. cut forecasts for may department stores, pulte homes and goodyear tire & rubber. estimates have been trimmed for caterpillar and ingersoll-rand and cummins. worries about terrorism, the economy and job growth may cause c.e.o.’s to hold back capital spending, hurting technology companies.

>> well, there’s definitely a reluctance from a c.e.o. standpoint to invest, to take that excess cash flow that a lot of companies are generating and spend it on i.t., especially in the second half of the year.

>> those concerns are one reason analysts have reduced forecasts for texas instruments, national semiconducter and intel since july 1. intel’s profits, of course, are also being hurt by high inventories. peter boockvar says many companies may overcome the head winds in the quarter. industrial companies like alcoa, he says, may be able to raise prices faster than rising energy costs. that could help them meet profit targets.

>> thank you, greg miles. well, a mega deal to tell but in commercial real estate. general growth properties is buying rouse for $7.2 billion. the all cash acquisition will add properties to general growth’s portfolio such as boston’s marketplace and the woodlands in houston. shareholders in rouse will receive $67.50 a share, a 33% premium over thursday’s closing price. second largest u.s. owner of shopping malls will assume about $5.5 billion of debt. let’s get to the numbers as they finished on friday afternoon. we saw a rally, actually the fourth rally out of five for the week. dow jones industrial average up 1.7%. s&p 500 up .66% finishing 1,098. nasdaq up 1% finishing at 1,838. checking volume at big board, 1.12 billion shares traded. advancers beating decliners somewhere around 3-1. nasdaq, volume of 1.32 billion shares. light for the nasdaq. light volume there which you expect on a friday in august. advancers beating decliners also 3-1. moving 20 performance of major indexes for the week. dow up almost 3% for the week. s&p 500 up 3.1% for the week. nasdaq the winner of the big three indexes up 4.6% for the week. well, moving to other major market averages. nyse composite up .66%. amex up .3%. russell 2000, a measure of small caps up almost 2%. checking the broadest measure, wilshire 5000, up .8% on friday’s trading. now moving to treasuries. we see selling action on the 10- year as stocks rallied. we saw treasuries sell off to the tune of 5/32 for the 10-year and yield up to 4.23%. at the shorter end. curve―there’s the five-year. down 5/32. moving to the two-year, down 3/ 32. that yield up to 2.43%. checking the day on currencies, euro finishes at $1.23. not much change in the yen on the day. 109.12 yen to the dollar. well, stocks rallied for both the day and the week as we just indicated leading to the biggest gain in 10 months. for more on today’s trading action, julie hyman from the big board. perhaps we’ll have that later. moving on, oil companies are not the only energy-related companies that enjoyed rising share prices. investors have poured money into stocks that deal in coal and also alternative energy technologies. two analysts who cover the companies that those industries represent will be here to discuss those groups right after the break. stay with us.