朗读练习作业

Interview: Oil and gas conference
Chesapeake Energy--- McClendon, Aubrey--- Chief Executive Officer
>> after outperforming most other corporate bonds the debt of defense companies like boeing and lockheed martin may lag other bonds. overall debt of defense companies has returned about 1.6% compared to a return of 1% for all other investment grade corporate bonds. investors have been drawn to defense company debt amid record military spending by the u.s. government but investors and analysts say the economy, as the economy continues to grow higher yields in other industries may become more attractive. oil supply concerns eased today but traders say the market is still jittery. we head to denver, colorado for the oil and gas conference where my colleague peter cook is standing by with aubrey mcclendon the chief executive of chesapeake energy, an oil and natural gas producer. peter, take it away.

>> thanks very much. thanks for the time today. we appreciate it.

>> thank you, peter.

>> the timing of this event, we see record high prices for oil and gas, number five independent energy gas producer in the country, chesapeake. give me your take on the situation right now. we’re seeing a lot of smiles on some executives here. do you all have smiles on your face?

>> we are, but we work pretty hard so try to keep the smiles to ourselves because for 15 years this wasn’t a very easy place to make money. as there was too much supply of gas and not enough demand. gas prices were low. that set the stage for where we are today which is we’re in the third or fourth year of a time when gas demand is outstripping supply. you’ve had a price response. gas has gone from $2 to $6 over the last four years and so it’s just the reverse of what we saw in the 1980’s and the 1990’s.

>> do you think these prices are here to stay?

>> i think they are here to stay for as long as we’re able to look out which we think is approximately the next five years. here’s why. you have an economy that’s continuing to grow 2%, 3%, 4% per year, gas goes up every year―gas is at the margin supply and all of that new generation, you have gas supply coming down every year by anywhere from 1% to 3%. so the collision between those two very powerful structural forces has led to a tripling of gas prices over the last three to four to five years and neither of those two trends have been fixed. the economy is still getting bigger, gas supply is still getting smaller and so the only thing that can keep the market in balance is price. and that’s going to continue to play out.

>> we know gas supplies, north america and the u.s., are dwindling. your focus is essentially north america, specifically the region of texas, oklahoma, some of these areas. why exactly are you focusing so much of your attention in this one area and specifically through acquisitions which you’ve been very busy with.

>> right, peter. we think the area in which you’ve just described, the mid continent, is the best place in america to produce, to look for and explore and produce natural gas. no federal land issues, no regulatory issues, lots of deep drilling opportunities and so we just think it’s the best place for us to be the good guys here, which we’re trying to increase the supply of natural gas and have taken our company from no production 15 years ago to today, the fifth largest producer in the country. nevertheless, the growth we’re generating can’t overcome the production declines from the majors as they shift more of their hunt for gas around the world. and that’s a huge part of the story today is the majors are looking for gas that will supply america for the next 50 years over the in ex-five years their production will―over the next five years their production will continue to climb. we’ll try and make up the slack but the independent sector is not big enough to do that so you’ll see continued pressure on gas prices over the next five years until the new supplies of liquefied natural gas come into the country.

>> the acquisitions you’ve made, one deal a few days ago, $390 million i believe. you’ve hedged a lot of the gas that you’ve taken as part of this acquisition. tell me why. what sort of prices have you locked in on? and this decision with the most recent purchase, not to hedge that―those proceeds, why not?

>> that’s correct. we didn’t hedge our two most recent acquisitions because we didn’t feel we were in a time of a price spike. and our view is that with too much demand for the supply that’s out there, you get an increasing price over time, but periodically you’ll have a panic. it could be a cold winter in new york and boston, it could be a short squeeze on wall street. it could be a number of things. at which time gas prices could go up by 20% or 25% in a week or two. it would be unsustainable for the longer term at those prices. we want to take advantage of that. so this summer because of the weather patterns we just haven’t had the price spikes. we didn’t hedge these latest two acquisitions. however, we are hedged 50% corporately for the next six months and so if gas prices do get weaker, we’re in a position to still be in good shape while at the same time having maintained quite a bit of dry powder in case we do get a spike this winter.

>> you’re the number one driller in the country right now in terms of total riggs.

>> right.

>> do you expect that to continue?

>> yes, sir i do. we’re out there today with 63 riggs about 5% of all of the drilling in the u.s. we produce about 2% of the gas in the country so again we’re doing more than our fair share to try and increase the supplies of natural gas in the u.s. we’re active today because it’s highly profitable to be drig today―drilling today. we’ve built the largest onshore inventory of leasehold in america and the largest onshore inventory of three dimensional seismic over the last six years. we were built for this moment in time. and we’re executing today almost flawlessly.

>> all right. leave it right there. thanks.

>> thank you.

>> we’ll send it back to you in new york.

>> thank you. bloomberg’s peter cook with aubrey mcclendon chief executive of chesapeake energy. when we come back the index this morning raised eyebrows on the service sector.

在线播报
Listen Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Alert for NYSE --- Greg (slow)
Pharmaceutical industry --- Allan (slow)
>> welcome to this final exciting hour of “world financial report.” i’m bob bowdon. energy in the spotlight for another day. supply concerns eased on several fronts. russia’s largest oil exporter yukos said it has been given access to accounts needed to pay back taxes and oil production. saudi arabia has started pumping two new fields ahead of schedule and may delay the shutdown of older wells. the saudis may be able to boost output by 8%. the price of crude oil in new york on the day fell marginally after hitting the record highs early in the session. you see the intraday chart heading lower finishing down 3% at $42.80. gasoline futures plunged after a surprise increase in inventories. you see that down 3.3% for new york unleaded. the energy department reported the u.s. reserves of the fuel, that is unleaded, reached a 17-month high. well, moving on, even though the price of crude oil fell a little by the close of trading, airlines will lose as much as $6 billion this year on international routes if oil prices stay at these record levels. the international air transport association went from forecasting a gain of $3 billion at the beginning of the year to now a $6 billion loss. the industry was forecast to break even with oil at $33 a barrel. every dollar above that level means a billion dollars in losses for the airlines. delta airlines’ pilots’ union says the carrier’s request for a 35% wage cut plus other concessions is an effort to gauge them. the union offered concessions it said were worth more than $655 million. delta is trying to reduce costs to avoid a chapter 11 bankruptcy filing. shares are down almost 3% for the 10-year yield hovering near its lowest in more than two weeks on terrorism concerns. we have had five days, consecutive days of rallies in treasuries before today’s little change, you see to the five year, up 1/32. the two-year utterly unchanged on the day. the yield holds at 2.64%. well, stocks benefited in today’s session as oil dropped from its highs and as food and energy stocks rose. our julie hyman is at the big board with the wrapup of the day’s trading action.

>> well, the markets finished mixed today, really moving sort of in an inverse relationship to what we saw with the oil prices in today’s session. oil of course was the theme yesterday as it rose and the markets fell. but today, it fell and for the most part the markets rebounded, although the s&p 500 didn’t manage to rise by the end of today’s session. if you look at the oil, the stocks in today’s session, really the biggest decliner within the s&p 500 was the energy group and a lot of the stocks that made records highs yesterday or close to record highs came down off of those highs in today’s session. you see some of them there, exxon mobil, chevron texaco, conaco phillips as well as schlumberger all falling in today’s session. some of the stocks that benefited the most from the drop in oil were the so-called defenses. these are stocks that do well even in the economic downturn because people keep spending money on things like food and utilities. so the food group did well in today’s session. supermarkets stocks rising. wal-mart, walgreens, cosco -- costco and ail bertson’s all rising today. the utilities index did well led by duke energy there, another company in the category that we’re talking about that does well even when the economy does not necessarily do well. real estate companies also were strong in today’s session led by equity office properties trust. this after the company came out with earnings that beat analysts’ estimates. that led the real estate group higher. qwest communications fell for a second day. yesterday fell 20% after its second quarter loss widened, falling again in today’s session. back over to you.

>> thank you, julie. treasury secretary john snow visited the new york stock exchange today just three days after the federal government raised its terrorist alert citing the nyse as a possible target. bloomberg’s greg miles interviewed secretary snow during his visit and is here and joins me onset with that report.

>> a very relaxed secretary considering what’s happened in the past few days. secretary snow is the latest in the list of lead thears have visited the new york stock exchange, the world’s largest stock exchange this week. that’s part of a campaign to persuade the public and investors that terrorist threats won’t shut down the u.s. financial markets . secretary snow did say, though, the continued terrorist threats could dampen the growth of the u.s. economy.

>> absolutely. i think the threats of terrorism create uncertainty and uncertainty is the enemy of growth and prosperity. that’s why we’re taking all these steps we can to assure the markets , to ensure investors, to assure american citizens that everything is being done.

>> as a result of the latest intelligence on al qaeda’s targets, snow said the treasury department is taking special steps to protect the u.s. financial system during the next three months during the election season.

>> i won’t go into the details about all the things that have been done to harden facilities and test backup systems and put backup systems in place and make sure we’re as free from vulnerability on computer viruses as possible, but let me assure you that we’re in a lot better position today.

>> snow is also asking congress to raise the limit on the federal government’s debt by september at the peak of the election campaign. snow told me he fully expects congress including many democrats to raise the limit. even though the u.s. has a record federal budget deficit. lot of optimism there, bob.

>> thank you, greg miles. new york attorney general eliot spitzer is sugai the nation’s third largest pharmacy benefit company for allegedly overcharging the state by tens of millions of dollars. the lawsuit marked what spitzer calls his third front of attack against abuses in the pharmaceutical industry and allan dodds frank joins me with that story.

>> bob, new york attorney general eliot spitzer charged express scripts has overcharged new york by as much as $1 is00 million while handling prescription benefit services for one million customers in the state employee empire health plan ch the attorney general said in a press conference that express scripts illegally held onto tens of millions of dollars that should have been passed onto the state’s empire customers.

>> they were simply committing fraud. it is an ugly word but what they were doing. it’s wrong. they’re going to be held liable. it’s millions of dollars and cuts to the core of the integrity of their company and we’re not going to let them get away with it.

>> express scripts which has a multiyear contract with new york state, he said, circumvented the contract. the state contract for express scripts to earn a set administration fee plus $1.20 for each per scripings it handles while giving any savings from rebates back to the state.

>> the company first disclosed the spitzer investigation last week and since then its stock has fallen 13% or nearly $10. it’s down $1.37 today closing at $62.48. express scripts has disclosed it has been contacted by 18 other state attorneys general. in the statement today the company said it would vigorously defend itself in court and it said it had saved the state millions of dollars in rebates. spitzer said efforts to settle the case, bob, have failed.

>> very well. thank you, allan dodds frank. moving on news from eli lilly today u.s. regulators cleared its drug for depression. simbalta is lilly’s first antidepressant to win f.d.a. approval since 1987, prozac. it targets two chemical messengers in the brain, prozac and similar other antidepressants focus on just one. analysts estimate the annual sales of the new drug may reach $2 billion. lilly estimates almost 19 million americans suffer from depression each year. when we come back we’ll focus on energy supply and demand and go to the oil and gas conference in denver. we’ll hear from aubrey mcclendon the chief executive officer of chesapeake energy when we return.

Discuss terrorism and security --- Greg Mile (slow)
>> halliburton has agreed to pay their 7.5 million to settle a securities and exchange commission investigation. the s.e.c. was looking into accounting at halliburton when vice president dick cheney headed the firm. the s.e.c. says halliburton failed in 1998 to disclose a change in the way it booked some construction work revenue. the company settled the investigation without admitting or denying wrongdoing. halliburton faces two criminal probes related to operations in iraq and iran and an s.e.c. investigation into the alleged bribes or into alleged bribes, rather, to win business in nigeria. homeland security secretary tom ridge met in new york city today with representatives of 25 major u.s. corporations, including citigroup chairman sandy weill, to discuss terrorism and security. new york state and city leaders also in attendance and greg miles was there at a press conference after the meeting and joins us now with the lowdown. what was going on?

>> the security was quite tight. the secretary tom ridge said the federal government took unusual steps over the weekend to privately alert several new york corporations that al qaeda had been scouting their headquarters. the public learned this news only later when al qaeda had been compiling what ridge called a volume of information about the offices of citigroup, prudential and the new york stock exchange. corporate representatives told ridge today that the early warnings are key to enabling companies to prepare for attacks.

>> one of the points that several of the members of the -- several security professionals emphasized was that the hope and the desire that we continue to get them this kind of specific information in advance of everybody else. over the weekend, there’s a great deal of concern about going public and when you go public but we wanted to get some of this information to security professionals before it went public so they could notify their employees. i’d much rather have these men and women who showed up for work on monday morning begin to receive notification from their employer.

>> ridge said there was no sign at all that al qaeda thus far it infiltrated the headquarters of any large u.s. corporation.

>> there’s no such information. it’s interesting, the security professionals in the financial serious―services arena alerted me, there are rigorous background checks they do before you can have critical positions in these companies, as well. but the answer to the question is no.

>> secretary ridge responded to criticism that much of the latest intelligence about new york companies is three to four years old. ridge said that a key part of the intelligence had been gathered in january and said this information will give companies insight regarding how to prepare against future attacks. matt.

>> interesting timing, too, after the increased threat condition yesterday. thank you very much. appreciate it. in other news, we turn to healthcare industry. anthem is suing california insurance commissioner john garrahmendy saying he overstepped his legal authority in rejecting a merger. he blocked the company’s $16 billion proposed acquisition of wellpoint network saying the deal would drive up healthcare costs in california. the merger has won the approval of the federal government, 10 states and shareholders of both companies. pfizer says it’s suing five internet pharmacies in trying trying to seize the domain names of two dozen others to stop the sale of counterfeit viagra and the company is starting an ad campaign to warn consumers about fake drugs. viagra has been losing sales to rival products cialis and levitra, sold by glaxosmithkline and bayer. viagra’s worldwide revenue dropped 70% in the second quarter. on the hb, celgene says it may be able to raise the price of thalamid, a treatment for blood and bone marrow cancer. chief executive officer john jackson says that is because the drug benefits, because of its competitive landscape, but a price increase may be put through.

>> one of the good things about thalamid, of course, is it’s helping save a lot of lives in multiple myeloma and we hope to get approval in october and we’ll look at the pricing at that time and we’ll take it from there. we are actually less than half the price of our key competitor right now.

>> if so, the bottom line or their profits should get a boost mainly from the prescription drug coverage under the new medicare law. the c.e.o. also says that celgene’s reimbursement program is one of the most generous in the industry.

>> starting in 2006, much of that will be reimbursed by the government so that will be great for celgene in that about $50 million of that will be covered and drop to the bottom line. so that’s a great positive but we have a generous program there.

>> checking on the stock, you can see, up 16% year to date. tenet healthcare shares ended the day lower after the company said its losses more than doubled in the second quarter, down 3%. tenet had to take a charge against earnings by writing down the value of unprofitable hospitals and lost 91 cents a share. backing out certain charges, they lost six cents. that’s five cents more than wall street estimated. sales were also down and the company received fewer payments from the government and managed care plans. the fed’s preferred measure of inflation has reached what economists call a “zone of comfort.” when we return, we’ll look at this in our “chart of the day.”

在线播报
Listen Market briefing --- Mate (slow)
>> we’re back. consumer spending fell in june for the first time in nine months. americans cut back on purchases due to higher fuel prices and slower income growth. personal spending down .7% month on month, that was more than expected. june caps the weakest for the for consumer spending since the 2001 recession. personal income was up in june, less than expected and below the recent trend. consumer spending accounts per more than 2/3 of the u.s. economy. as job growth resumes, economists expect spending to pick up. the june measure of inflation watched by the federal reserve was unchanged from a month ago, installing a pause―nalagy a pause in recent price trends, signaling a pause. the commerce department’s core personal consumption expenditures index is the topic today and joining us is tom keene, our editor at large.

>> one of the reasons this is followed is it’s alan greenspan’s favorite measurement of overall inflation. what we saw today was a sigh of relief as the fears of the number ballooning up haven’t come to fruition when you take out food and energy. if we can turn to the chart, you can get a long-term picture. what’s great about this chart, the mathematicians say it’s elegant. the three blue circle, the one-year moving average, the green line, touching up perfectly against the one-year moving average and we’re just below that now. we haven’t gone to an excessive level of what has been a long-term structural trend to declining price change.

>> this is 25 years’ worth, putting that into context.

>> correct.

>> what does today’s data say about this measured federal reserve?

>> it says that there may be rate hikes. most people are looking for an august rate hike and talk of a possible pause in september but certainly the immediacy is not there from most economists we talk to for a 50-basis point jump or that panic of going to 2% or 3%.

>> i put up the price, the personal spending number, the monthly chart here. it’s a volatile number. the annualized number shows a 5.3% gain from a year ago, personal spending up. does that matter?

>> it’s just lumpy, very, very lumpy. we saw auto sales this afternoon doing much better than june. most of the consumption data, experts are telling us, they look at more three months and one-year data because as you see on this chart, it goes back and forth.

>> didn’t get time to get to nomar, out of time. thank you very much. we turn now to world and national news. british police have arrested 13 suspected terrorists in nationwide raids and mark crumpton tracking that story and more and joins us now with details.

The gravity and severity of the warning
LYNX INV. ADVISORY --- TANOUS, PETER --- President
>> headlines from lockheed martin, the company said it won an $820 million award to build spy planes for the u.s. army and it says that contract, if you will, could grow to as much as $6 billion from $820 million, lockheed martin. shares not reacting much in after hours’ trade, up 1.5% in regular trade today. the same could not be said for adobe systems, up over 5% at one point. the company says third-quarter profit will rise more than originally forecast and sales will be better than expected after strong demand for its design and publishing programs. you probably have used adobe acrobat if you’ve downloaded documents from the internet. here are the numbers, 36 to 41 cents, now, up from 31 to 36. before the expectation, the average estimate now stands at 34 cents on sales of $380 to $400 million. adobe will add employees and raise salaries and will invest more in research. sales at adobe have increased seven straight quarters. you can see the stock is up $2 and change there in the extended hours. the government is warning of a terrorist plot that aims a major attack on financial institutions, symbolic of u.s. influence in the global economy. for more on terrorism and its impact on the markets , we bring in peter tanous, president of lynx investment advisory, managing over $1 billion. beginning where we were with our earlier strategist and that was probably like most of us you were surprised in the direction of the markets today given the gravity and severity of the warning that came out on sunday.

>> not all that surprised, let’s face it. the market has become inured to the terrorist threats and also it’s good to remember that when tom ridge spoke about it, he didn’t speak about something happening on monday, he spoke of a time frame that extends from now until the presidential election. that’s three months to worry about this.

>> it’s interesting because if you look at the s&p 500, it’s been in a narrow trading rainfall, in lehman’s terms, has gone nowhere the better part of the year and the survey results that the number one cause and concern or threat to the economy appears to be terrorism and today we get a real indication that there could be terrorism on very specific sites and the market moves higher.

>> yeah. but, of course, trying to make sense out of a single day’s market move is an exercise in futility and we’ll never get the answer to that. the fact is that the market has been concerned as you correctly said about a slowdown in the economy. remember the second-quarter numbers, for example, and one day does not a market make. we have lots of other things to be concerned about and now we can throw in the new terrorism threat, as well.

>> some people might say that it could be an exercise in futility in terms of trying to guess if, when and where a terrorist attack might be. we’re going on three years, knock wood, here in the u.s. without a major incident.

>> absolutely. and remember what yogi berra said, predictions are very hard to make, especially about the future. that’s where we are today. we’re talking about not only a general terrorist threat but specific targets, specific buildings. the fact that the new york stock exchange is targeted, not surprising, the fact that citicorp is targeted, not surprising, but that they targeted the i.m.f. and world bank is positively bizarre. the i.m.f. and world bank is not an american institution, has no effect on the american economy and the vast majority of its employees are not american.

>> do you invest through this? some have said you can’t predict it and typically the facts of a terrorist attack, unless catastrophic, would be short-lived so do you just invest right on through as if you can’t predict something like a terrorist attack?

>> absolutely, because you just don’t know. and that is why the market and most investors can’t afford to factor it in too importantly into their decision. let’s return to worrying about what god intended us to worry about about the market which is the economy and earnings. that’s where our concern should be.

>> let’s talk about the economy. we’ll get the jobless number out on friday. is that, as an investment adviser, is that an important number to you in your work in terms of how strong that jobs number comes out?

>> matt, this particular one is very important. why? because we just had this little mini shock of a slower-than-expected second-quarter growth, you’ll recall. then on top of that, we had the june job report which was very disappointing, at a little over 100,000, compared with over 300,000 in each of the preceding months. so this jobs report on friday will be very, very important. if it were to mirror the 100,000 of last month, that would be bad, but it’s not expected to.

>> we’ll watch that jobs report alongside with you. stay with us.

在线播报
Listen Market briefing --- Mate (slow)
Nasdaq --- Julie (slow)
Tightened security --- Allan (slow)
welcome to “world financial report.” i’m matt nesto. let’s give you the numbers from the market . the dow, s&p and nasdaq, all up here today. bonds also up and the dollar down. a day that began with you a dark cloud of increased terrorist threats hanging over it. the volume light on the nyse and nasdaq, below average today. julie hyman was at the big board today, not the nasdaq, and joins us now with a day that kind of pulled a u-turn on expectations and finished higher.

>> hey there, matt. a change of venue for me, today and a change in the market , as well, as it started lower after the terror alerts in the past couple of days and rising by the end of the day’s session. talking to traders today, they said we’ve gotten a lot of terror alerts over the past couple of years and until there is an attack, the markets will be able to swallow the news. indeed, that’s what happened in the session. it was the fifth straight gain for the dow and also for the s&p, the longest streak for the dow since last december and for the s&p since may. so, really rising on good news that we had in the session from various companies on earnings, once again. procter & gamble leading the household products index higher in today’s session. fourth-quarter profit was up 44%, more than estimated by analysts.% they were helped by their beauty care business and developing business in china. as you can see there, procter & gamble up, clorox, kimberly-clark, as well as gillette all rising today, the household products makers doing well in the session today. we can switch over to the cable companies as they were a big gainer today. the media index, a big gainer today. cox communications leading the way after cox enterprises said it was offering $7.9 billion to take the company private and buy out the remaining stake in the company, $32 for each share, the offer price, 16% higher than cox’s close on friday, those shares up 20%, leading some investors to believe there could be a higher bid and pulling up the other cable companies as well. other companies doing well today, checking the financials as they experienced a turnaround. they were some of the worst hit earlier in the session and then rallied by the end of the day. prudential finished lower but citigroup and j.p. morgan managed to rise. another company that was doing well earlier today and then lost steam was j.c. penney. another measure of the consumer spending right now, j.c. penney said second-quarter profit was higher than expected. also announced a $3 billion stock buyback. back to you.

>> thank you very much. against that threat, the terrorist threat backdrop, new york stock exchange chief executive john thain today proposed that the 212-year-old institution allow for more electronic trading, a plan he expects will be reality within a year. allan dodds frank down on rouault wall street all day along amidst the tightened security. tell us about the day today.

>> john thain started the day determined to have a regular day on wall street. he planned to anounce the initiative that the new york stock exchange is taking as they had limited the number of trades you could make, electronic, to 1,099 shares they took that limit off but first he came out here to reassure people as security was very heavy. there were very many police officers with m-4 automatic weapons. cops were checking cars cars for blocks around. and in mid afternoon, john thain decided to hold the press conference he had planned last week although he knew of the terrorist threat regarding the stock exchange. when john thain spoke about the initiative, he made the point of saying they face a lot of competition, that’s a big threat here, too, the reality that other markets are trying to take their business. i don’t know if we can hear from john thain.

>> if we did nothing, there is an important group of our customer base who say they want to trade in a different way. they want to trade immediately, electronically and with certainty and anonymity. if we didn’t respond to that customer base, they would pull their volume off of the exchange and trade in other alternative markets that give them that electronic capability.

>> now, there you have it, competition is the big threat down here as far as these guys are concerned. one of the veteran specialists i talked to today said today was no different on the floor from any day since september 11, 2001. matt.

>> allan dodds frank, thank you, reporting from the stangeg in lower manhattan. looking at how the bonds in some of the other markets responded to the increased terror threat―treasury notes were up after the government said al qaeda may attack financial institutions in new york, washington or parts of new jersey just across the hudson river from mant. yields today at their lowest in about a week. you can see little change there in the 10-year note. similar small but modest increases for the five-year and two-year notes, as well. the director of research at mizuho securities in hoboken, new jersey, william quan, tells us that “this move up in bond prices ruins the bear market trend that had been developing in treasuries before the terror alert announcement.” investors were betting on a decline in the price of 10-year treasuries. the yield on the 10-year note, moving up inversely to the price, has moved up almost .2% or 19 basis points so far this year, gains, however, were pared after july’s manufacturing number rose, again, and a larger economic context, there are two reports that might change the outlook for bonds over the next two weeks. friday’s employment report, of course, a big one, and the federal reserve’s rate decision a week from tomorrow. friday’s employment report is expected to show that the jobless rate remained at 5.6% in july and the number of jobs added to the u.s. economy during the month leveled out at 243,000. next tuesday, the fed wisely expected to add another .25% increase to the benchmark rate, bringing us to 1.5%, matching a similar move, first we’ve seen in i think four years out at the end of june. you may recall that was when the central bank moved rates higher from 1% to 1.25%. oil prices were steady today. they’re still very much on the radar screen of investors since higher energy prices act to slow the economy. you can see, up two cents in new york trade today, above $43.50 a barrel, again. if you look at the price of oil over the past year, you’re 35% higher. gold prices in new york rose for a second day. again, terrorist concerns credited for that move. and the dollar was down today, moving lower against its big three rivals and also the swiss franc on concerns that any terrorist attack of size on the financial sector in the u.s. would hurt the economic outlook here. a couple of deals to tell you about―fifth third bancorp is buying first national bankshares of flo for $1.6 billion in stock, 41% more than first national’s closing price on friday.% the deal will help fifth third enter five markets in florida. combined the banks the have $6 billion in assets and 93 branches in the sunshine state. directt buying pegasus television satellitet unit for nearly $1 billion, adding 1.1 million customers. pegasus made 96% of its revenues from reselling directv’s services and in june, it sued directv, claiming it sought to destroy pegasus by stealing its business. the transaction is expected to close in four to six weeks and must be approved by a bankruptcy court. stocks bumped back from declined triggered by warnings of a possible terrorist attack. when we return, we’ll speak with peter tanous, president of lynx investment advisers about the terrorist threats, the markets and a lot more.

Asia pacific markets --- Steven (slow)
London markets --- London (slow)
>> all right. we are back now and for a preview of what might be moving markets in the asia pacific, we’re joined by steven angle, who has this report from our hong kong bureau.

>> in the new week here in the asia pacific region, the floods of earnings reports from top asian companies continues, including from toyota motor, and china mer chants bank. h.t.t. holdings will report first half results. the chairman says earnings from hsbc’s $15.5 billion purchase of household international in march of last year is now being reflect nd this year’s results and improved economic growth in hong kong and the u.s. boosted earnings in the first four months. japan’s top automaker, toyota motor reports first quarter earnings on tuesday as other japanese exporters, including rival honda motor, have been raising their full-year net income forecast as a weaker than expected yen inflates the value of their overseas sales and profit. on wednesday, we’ll also get japanese automaker sales figures from the u.s. where they have been gaining market share. bejing’s biggest supermarket chain is out with earnings on monday. it currently operates and manages 24 supermarkets, three hypermarkets and 300 convenience stores and has plans to open 150 more stores in bejing this year. southeast asia’s biggest phone company, singtel is out on thursday. profit likely fell on lower investment gains. profit grew last year in part because of its majority stake sell in singaporepost. on the eco front, highlights include retail sales from australia and hong kong and inflation figures from south korea. that’s it from hong kong. back to you.

>> all right. from steven angle in our hong kong bureau. we go over to europe where investors there will be focusing on bank earnings among other things in the coming week. paul george with a preview from london.

>> well, last week was a busy one for european earnings and this one will be far from quiet. more than 10% of the dow jones stoxx 50 in terms of weighing report results on monday. so far, 23 members of index have reported earnings for the most recent quarter confirm of those, more than 56% have had earnings above estimates of analysts surveyed by bloomberg. that compares with 57% of all companies reporting in the first quarter. by the end of the week, 35 companies and more than 70% of the index weighting will have posted their results. when nine of europe’s biggest banks report earnings in the coming week, the majority will probably say earnings are on the up as economic growth fuels their profits. on monday, hsbc may say that first half net income rose 28%. in france, bmp paribas will probably report a 13% increase in second quarter profit while in amsterdam, abn amro holding may say net income rose 4%. u.k. banks are also benefiting from increasing consumer spending in the united states, where hsbc and royal bank of scotland have made acquisitions. royal bank of scotland, the u.k.’s second largest bank by assets will probably say on tuesday that its first half earnings rose business 22%. barclay a’s will probably report a 12% increase in first half earnings while standard charter is out with first half results. investors will want to hear about the bank’s plans for expansion in china. earnings at u.k. banks are fueled by record domestic consumer spending. although four rate hikes by the bank of england since november may slow growth in the second half of the year. away from earnings, and there are plenty more, p.m.i. figures are due from spain, italy, france and germany and will probably show manufacturing in the dozen nation year row zone expanded in july for an 11th month. also from the united kingdom, watch for p.m.i. figures for manufacturing and also for services. just some, just some of the highlights of the week to come in europe.

>> all right. well, that was, of course, paul george reporting from our london bureau. the yankees, one of several new york sports teams looking for a new home. but the city isn’t handing over funding that easily. that story and a whole lot more coming up in our “money and sports” segment after this pitch. oooh. and break.

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Listen Market briefing --- Mate (slow)
Nasdaq --- Bob (fast)
Research report --- Liz (slow)
>> welcome back to “world financial report.” i’m matt nesto. let’s walk you through the day that was on wall street. the dow and the s&p both up .1%, three times as much for the nasdaq. checking on bonds today, big move for the 10-year note. in fact, its biggest one-day gain in two weeks. we’re at 4.47%. yield. and if you look at directional moves, the five-year also rising yield down and the two-year yield, you see the yields down. of course, the bond prices are going to be up. on to the dollar we go. the dollar continuing its recent gains. you see the yen actually bouncing back. today, the latest trade. but down for the month and the week. if you look at the yen―excuse me f you look at the euro, it, too, down a little bit. the pound inching higher. bob bowdon has details on today’s nasdaq trading from the market site in times square.

>> we finished the week and finished the month of july and the question is whether you your nasdaq glass is half empty or half full. for you pessimists out there you can look at the month seeing in july the nasdaq index was down 7.8%, the worst month since december of 2002. you have to go back 19 months to find a worse month than july for the nasdaq. but for you optimists out there, for the glass half full, look at the week, the nasdaq up 2% for the week, break ago four consecutive week slide on this particular week. now on the day, the nasdaq was up one third of 1% on friday’s session. although on very light volume, less than 1.5 billion shares traded. you have to go back 15 sessions to final lighter volume than you had today on the nasdaq. it is not surprising on a friday in the summertime to have light volume f. there was one overall theme, check chip equipment stocks on the day. the likes of kla-tencor up 6.2%, their fiscal fourth quarter earnings per share more than trippled and were better than expectations. this stock had been down 34% year to date before today. another example, variant semiconductor had been down 37% before today, but up almost 8% after giving a forecast that presented a mid point above analyst expectations. other chip equipment makers rallied as well, the likes of amat and cree dent systems up. from chip equipment makers to chips themselves. intersil was up 10% on the day because it released earnings and expectations, 20 cents a share and gave a forecast that met expectations, 22 cents. i had been down 33% year-to-date before today. another beaten up chip stock and by simply meeting those numbers, turned around and rallied to be the best nasdaq 100 stock. the worst, power conversion down 13%. they hit a 15-week low after reporting earnings less than expected. back to you.

>> pairs of college-bound students take note. do you want to give your student the best sho at becoming a corporate chief in where do you send him or her? if you said add ivy league school, think again. c.e.o.s are four times as more likely to have received their degree from a publicly funded university. joining us is liz whillen who has just completed the research report. the your of wisconsin known for beer, bicycles and birken stocks ties with harvard. what a great headline. elaborate, please.

>> i was a surprise to final that the university of wisconsin uzz was the number one school for a while it was the number one, but now it is tied with harvard. this is a mid western school where people are fanatic about the bucky badgers of the football team and basketball and fanatical about studying a well. it was a surprise to final that this is where most of the u.s. c.e.o.’s graduated from.

>> undergraduate, of course, right?

>> undergraduate. it is the leading undergraduate.

>> you had to go back and double check on the math when that popped up the first time. you must have been shocked. i’m sure wisconsin was pretty surprised, too.

>> actually, they weren’t. they were shocked that i was shocked. i went out and spent some time out there and they pointed out the great facilities, it is a tremendous research university. 29,000 undergraduates, a great variety, terrific engineering program. a lot of our c.e.o.s were engineering. the c.e.o. of exxon mobil was a chemical engineer. they have a terrific program for that as well.

>> it is interesting because we have been talking a lot about the price of admission to the ivy league schools, certainly no shortage of prestige there. our research pointing out that state-funned schools are pumping out more c.e.o.’s. is there a different kind of a training or candidate that comes out of the state-funded schools, if you will?

>> there are some people who believe that if you went to a state university, which can be as little as half the price of an ivy league school, you have to work so hard to make a name for yourself. you may not have the kind of connections that you’d final at an ivy league school. and there is a lot of―i interviewed the c.e.o.s with the first in their family to go to college, grew up on dairy farms in wisconsin and got to wisconsin and worked extremely hard and there’s sort of a mid western work ethic that kept popping up in minute i views.

>> i’m looking at the print out here, the m.b.a. research seems a little more predictable. harvard on top again.

>> absolutely. if you did get an m.b.a., you were likely―the largest number of m.b.a. graduates came from harvardment one of the very surprising things about our research was the large number of c.e.o.s who never finished college at all.

>> do you have a percentage or number on that?

>> we do. we had mickey aronson from carnival, charles bell, mcdonald’s, james cane from bear stearns dropped out of purdue, larry ellison of oracle, paul fireman of reebok. we had a long list. less than 5% of c.e.o.’s --

>> steve jobs was in there?

>> that’s right. less than 5% of the c.e.o.’s never finished college at all.

>> all right. i’m going to get in trouble if i don’t do this. this is the magazine that we, of course, put out here, “bloomberg markets “ magazine. sorry for the hasty little job. it is out on the newsstands now and pick up your copy and read liz’s story as well as details about the shakeup at credit suisse first boston. thanks to liz whillen for an interesting story and a glimpse inside of “bloomberg market “ magazine. coming up a preview of the trading week ahead in asia and europe. stick around for that.

Interview: Auto sales
Kia Motors --- Peter Buttefield --- America C.E.O.
>> hyundai affiliate key i can’t motors came out with second quarter earnings friday morning, reporting profit was unchanged from last year. net income at $159 million. the sales rose 14%. in early july, kia motors america announced a new sales record as its second consecutive month of record selling. they sold nearly 28,000 units, up 36% over the same period last year. my colleague, lane bajardi, discussed those numbers when he sat down with kia motors america c.e.o. peter butterfield.

>> we really did have a great quarter. we’ve consistently had growth since we came into the u.s. market 10 years ago and this year we’re up nearly 14% in the first six months and have found consumers really responding well to our product offerings.

>> mm-hmm. your u.s. sales for kia versus 50% for the past four years. the company has yet to establish a strong brand image in this market . how do you want the brand to be regarded by consumers? what should they be thinking of when they think of kia?

>> well, value number one, which we currently stand for, quality, number two, and safety, overall safety of the vehicle, number three.

>> mm-hmm. now it’s inexpensive comes to mind, certainly, whether it’s yours or your partners with hyundai or some of the other names at the lower end of the scale. and people often think of kia, first of all, as a low-priced product.

>> i think they did. keep in mind, kia is a young brand, only been in the u.s. market for 10 years and we entered with entry-level products. but our car brand features $10,000 entry-level rio up to the $25,000 or $30,000 monty on the car side. our average transaction price in the u.s. market is now approaching $20,000, which isn’t too far off the average transaction price in the car industry.

>> mm-hmm. sportage is one of the key names that you have had over the years and certainly on the entry into the u.s. market . is that going to be coming back anytime soon?

>> we’re glad to say that sportage is coming back this fall. it’s a unibody bruck a four-cylinder and six-cylinder engine and this is a product that’s delivered historically 50,000 volume to us which we haven’t had the benefit of the last two years. we are looking at the sportage to add another growth spurt to our company in 2005.

>> your sales are quarter of a million annually, close to the 300,000 threshhold that you mentioned for building your own factory in the united states. are you closer to taking this step here?

>> we’re certainly getting closer. we haven’t been shy about saying we believed in north american production in our chairman, chairman chung has stated his globalization strategy to builds products where the products are sold. we are closer to that point in time and we hope we can get to the 300,000-car level as quickly as possible.

>> following in the footsteps of the jam these automakers, they put their foothold as far as building u.s. plants, trucks in the united states. do you see yourself making a offering for a pickup truck plant in the united states?

>> we have expanded the car line to cover from the entry-level segment up into the premium sedan segment of large cars. so, we have most of the car segments covered. where we have opportunity from our product segment is in the truck segmentment we have a full-size minivan with a sedona. we’re coming back with a short wheel and long wheel base sedona. we have the mid sized sorento such and now we’re coming back with a small s.u.v. and there are opportunities for uses to expand.

>> how is demand? i noticed on your website, you’re offering $2500 cash back on a $13,000 car. why is that necessary at this point?

>> well, we have $1500 back on a spectra, and if you are an owner of a spectra, we have incentives to purchase another kia. if you look at the average rebates on the kia product lines, they’re well under the industry average for overall incentives.

>> how are july sales at this point as we get to the end of the month?

>> we’re having another good month in july. we had a terrific month in july 2003. we anticipate that we’ll about equal last july’s level this month.

>> when is the rebase train going to end with these incentives and rebays overall, certainly other automakers in this business rely even more heavily on them than you do. do you expect this to let up?

>> i don’t see it in the near future, frankly. rebates and incentives really have become part of the pricing model in the u.s. market today.

>> all right. there we have it. the c.e.o. of kia motors america. well, futures traders pared best that the 10-year treasury note will decline, according to the figures released from the chicago board of trade. the difference in the number of wagers by hedge funds and other large speculators on a decline in the 10-year note, compared with those on a gain, fell to 172,000 from 212,000 a week ago. also, for the week ending tuesday, speculators decreased their net-long position in crude oil futures. crude rose 5% this week. but gasoline traders increased their net-long position in new york gasoline futures during the same periods. gasoline rose 1.6% this week. net-long positions in heating oil also increased. heating oil gained little more than 2% for the week and turning to precious metal, speculators decreased their net-long positions there. gold prices eked out a gain for the week. as john kerry attempts the business of campaigning after receiving the nomination for president from the democratic ticket, business is preparing to attend to john kerry. we’re going to take a closer look at that next.

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Listen Market briefing --- Mate (slow)
Economists forecast --- June (slow)
NYSE --- Deb (fast)
Crude oil price --- Markt (slow)
>> welcome back to the “world financial report.” i’m matt nesto. the u.s. growth rate was slower than some economists forecast. june russo is here with the numbers and implications therein.

>> thanks, matt. that rate was the slowest in more than a year and the weakest pace of consumer spending since the 2001 he recession. rising energy prices led to the biggest drag on the economy -- consumer spending. it slowed to a 1% annual rate after a 4.1% gain the first three months. there is some concern about higher fuel prices cutting into retail sales and hurting the economy.

>> short-term obviously there is a worldwide supply tightness. if we don’t get any relief anytime soon, we’re going to see prices go up to 15, maybe higher, per barrel and that could have a real bad impact on the economy. the sad part about it is, what might finally bring energy prices down is when energy prices actually damage the economy.

>> inventories are building and the strong economy met more imports. business spending grew at an 8.9% rate. today’s report also contains the government’s annual revisions for g.d.p. statistics and this is one reason economists estimates may have been off the mark t. economy grew faster than expected in the first quarter. annual revisions mean the first quarter is now 4.5%, up from 3.9%. today’s report from the chicago purchasing managers shows business expanding at a fasters rate during july. the riegesal index rose to see 64.7% from 56.4% in june because of more orders, productions and a rise in backlogs and consumer confidences rose for a second straight month in july with a rebound in hiring. the university of michigan’s final index of consumer sentiment for july rose to 96.7, the highest all year. on consumer prices, the inflation measure closely wanted by the fed, the core personal consumption expenditures index rose 1.8%, slower than the first quarter. the measure is now within the central bank’s forecast. in a report, john ryding, bear stearns’ chief economist, said this report should in no way discourage the fed from raising rates a quarter point on august 10. matt?

>> thank you very much. interesting story, certainly. well, let’s talk about the numbers today. the markets , well, not only closed out on friday, they also close out the month. if you look at the dow, the s&p and the nasdaq, all inching higher today, the nasdaq the best of the three. the dow and the nasdaq, having a little surge at the bell, made those―well, turned some losses into tiny gains. the weekly story shows losses or shows gains, rather, for the first time in three, four, and five―four, five, and six weeks respectively for the nasdaq, dow, and s&p 500. if we look at the volume on the nyse today, you had just about 1.3 billion shares trading hands. on to bonds we go. nasdaq―there you go―now we go to the bonds. the bonds rallied. the best day for the 10-year note that we’ve seen in terms of the price in about two weeks. that pushes the yield, hovering close to a two-month low. similar gains for the five and two-year and if we look at the currencies here today, the dollar was mixed. so, you bought a little bit less yen for your dollar. the euro was down versus the dollar, nine days out of 10, and the pounds was up ever so slightly. well, the s&p snap add six-week losing streak. but for the month of july, a different story. that’s what i was trying to elaborate on earlier. deborah kostroun, i’m sure, will do a better job. deb?

>> well, it was kind of a poor performance for the major averages. in fact, so far this year, july has been the worst month so far. if you take a look at the dow, it was down 2.8%, the worst performance since january 2000 9 for the s&p and the nasdaq. that is their worst performance since december of 2002. seeing some pretty big losses. as we get into the month of august, of course that starts on monday with the trading day, so far, according to the stock trader’s almanac, august is the second worst month of the year for the dow since 1971. september is actually the worst month of the year for stocks. however, in august, during election years, they actually fare a little bit better. so we’ll have to see how the month of august does this year. semiconductors, we’ve been talking about them all throughout the month of july, namely because they were the worst performers. you can see what they’ve been doing over the past month, down almost 13%. however, this week, some of the best performers―in fact, for the past couple of days, semiconductor we have been talking about them being some of the best gainer, mainly because ties want semiconductor said earnings yesterday doubled and then you had kla-tencor saying earnings tripled and that helped out the sentiment as we’re closing out this month for semiconductors. but all in all, worst performers for the month on the s&p 500. as we get into next week, many traders focusing on the jocks report that we’re going to be getting next friday and then, of course, the feds, they will be meeting on august 10 and give us more insight into possibly raising those interest rates again. energy stocks winners once again throughout the week. you can see how energy stocks performed this month. best performer this is month and some of the energy stocks hitting 52-week highs. also remember that exxon at its best level since november of 2000. also chevron texaco at its best level since june of 2003. in addition, real estate stocks really kind of benefiting from the big rally that we saw in bonds and that is really pushed down the yields. the yields on the 10-year went down to 4.48% from 4.6% just on wednesday. of course, that g.d.p. report had a lot to do with that and that really helped out real estate among the best performers in today’s session. back to you in the studio, matt.

>> deb, thanks very much. well, crude oil in new york rose to a record for the second time this week, concern that supply from the world’s top exporters will be disrupted as fuel consumption surges, helping to keep the price high. for september delivery, crude futures were up over $1, at $43.80, about 2.5% for the week. crude oil about 5%. take a look at the action, we bring you bloomberg reporter mark shank. talk to me about the price of crude. the forecast is no relief in sight.

>> most definitely, according a bloomberg survey conducted today, prices should rise even higher next week.

>> help is not on the way?

>> no. maybe temporary help, but we’ve got ton a rather tough situation this year. on demand has been rising in all the major consuming countries and, at the same time, production capacity has not kept pace.

>> now earlier, i was doing some -- a little bit of work on oil. i put together a chart here. check it out. this is 20 years of crude. lots of arrows and colors and whatnot. the red line is a five-year average, i put that in terms of the price, $28.9 7. you can see we’re well above that and the green year is the 20-year average price, not inflation adjusted.

>> right.

>> he is jumping ahead here. he knows his stuff. but the 20-year average prices is $23.63. 90% above that. why does that matter and give me some idea of this price as to how it really is in terms of inflation and whatnot.

>> well, first of all, since 1990-91, when there was the first persian gulf war, american consumers had gotten used to cheap oil and relatively cheap gasoline and heating oil. so, you know, that has become a relatively minor part of people’s budgets, unlike in the 1970’s. but when adjusted for inflation, this huge rise we’ve seen in prices still hurts. it might be just over $40, but in 1980 dollar, that would be $75 and that’s what we were looking at at that time.

>> is that kind of what opec is saying in terms of―because i hear a lot of them saying our price ban will be moved up and they talk about the weak dollar and, you know, inflation and all these different things. is that part of the reason why this thing―look, the price of oil is just going to go up over time?

>> well, most definitely. they also are quite correct in saying that some of the reasons for the high prices are home made here in the u.s., such as the lack of refining capacity. so, they―they don’t feel that responsible. but, they have not invested in their infrastructure and, you know, there is demand out there.

>> and there’s other suppliers and that’s one of the problems, a lot of times people point to russia, but now we have uncertainty coming out of russia.

>> definitely. most of the opec members nationalize their oil industry. there are very few places where big oil companies can look for oil. russia was, you know, this gold mine, basically, and now it looks very shaky.

>> boy, does it. and the price of yukos is do you know two-thirdses from the very short-term. thank you very much. appreciate it. always good to have you on. mark shenk obviously covers the oil industry and energy markets for bloomberg. another strong sales month for key i can’t motors america. what new models are on tap to keep those cars a-sellin’? we’ll have the answer in our interview with c.e.o. peter butterfield up next.

Interview: Durable goods
SWISS RE --- KARL, KURT --- Chief Economist
>> the federal reserve’s latest summary of economic conditions shows that the economy, while growing, slowed a bit. the beige book, as it’s known, says manufacturing expanded in all districts while consumers restrained their spending at stores and auto dealerships. the anecdotetal summary matched fed chairman alan greenspan’s view that the economy is passing through a periods of, quote, softness. well, staying with the economy, durable goods orders rose last month, but it was only half the increase that most economists expected. the commerce department also revised may’s number lower, cutting it in half down to just .9%. if you back out cars and other transportation equipment, orders declined for the third straight month. communication equipment orders fell more than 4% and for more on the economy, we bring in kurt carl, he is the chief u.s. economist at swiss re. so, let’s get right into it and talk about these numbers here. your reaction here today. first on the durable goods.

>> well, a little disappointing. but on balance, we’re still very strongly up compared to a year ago and it was a very strong month, march, that lifted it quite high. so we’re still above earlier in the year.

>> what do you take away when we see something like communications in one single month falling 4%. that is a sharp monthly decrease.

>> well, we’ll look to see whether it gets revised later. that is one thing you look for. and often they have volatility, these orders, particularly the orders.

>> well f you look at the trend that we just showed there in terms of three consecutive months for the core number without autos and transports, is there reason for concern here? or is it just summer when factories shutter and things slow down?

>> i don’t think it’s summer, particularly. it’s predominantly just volatility in this particular index, which we’ve seen in the last few months very volatile. and sometimes we go through a patch like that. but transportation orders still count, too, you know.

>> so kurt karl not concerned by the data --

>> no.

>> i put up a graphic while you were talking. this is durable goods month on month, versus durable goods year on year. you can see the orange line is the year on year percent, the last move from a year ago is about 11%. and then, of course, we had a .7% increase month on month. what is that telling us in is that valuable information that often gets overlooked?

>> sure f. you look down the line of the report today that had the year on year increases, virtually all of them were positive. one negative. defense goods. but, you know, that has been very strong last year, obviously. so, it’s―as far as the manufacturing sectors go, everything is great. everything is up strong, virtually all of them were double-digittings as well. that is the way the manufacturers look at it and they have a high level of confidences.

>> let’s just get through the beige book real quick. any thoughts, anything jump out? >> some slowing, but modest improvement. pretty much across the board. so, we’re not in any kind of problem at this point in my expectations.

>> ok. let’s talk about your research. your july note, of course, it’s probably a month old now, but one of the things that jumped out at me said the stock market is fairly valued as of the end of 2003.

>> that hand gone much anywhere.

>> but why would that matter presumably? and the point is that making a crash less likely. is that really relative whether the stock has gone anywhere?

>> the stock market is not overvalued at this point. and you have a concern when it is in that kind of situation. it might crash. unlikely to crash if it’s fairly valued. but for asset managers, of course, you’d be neutral if it is fairly valued rather than overweight equities or underweigh equities.

>> yet again, we are coping with oil hitting a record high. almost $43 a barrel, the nymex today. do you think that’s going to last? if so, what affect is it going to have? we mentioned $10 a barrel, every $10 equals half a point off of g.d.p.

>> yeah, that’s right. yeah. the―hard to say, obviously. a lot of factors on it. we have enormous problems in iraq, of course. but saudi arabia affecting the market , not with disruptions in supply, but terrorist attacks, nigeria with problems and the civil war and venezuela with problems. hard to forecast.

>> i want to interrupt you for one second because we have headlines crossing on charles schwab, the company saying it will close 53 branches around the country. and that they’re going to fire 186 workers. it’s the seventh cost-cutting measure since 2001, this according to a spokesman on a telephone call. so, that’s charles schwab and, of course, we did just see the shakeup in management with the name sake and founder coming back in just last week to take over the reigns of that company. now, we pick it up. sorry to do that.

>> that’s ok.

>> news always. 30 seconds. talk to me about your forecast for what we’re going to see for g.d.p.

>> we’re going to see about 4% end of this week and that’s a little bit better of the consensus of what i’m expecting. it wasn’t really that bad of a quarter. as you see, we got some uptick towards tend. my collations, this was quite a substantial improvement for the quarters in business equipment. so, we’ll look at 4% and going ahead that’s what we’re going to get. not a bad number.

>> very much appreciate you coming in here today. that’s kurt karl, chief u.s. economist at swiss re. boeing shares on the up today after the company raised its forecast for 2004 and 2005. that story coming up next.

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Listen Market briefing --- Mate (slow)
Exxon Mobil --- Su (fast)
NYSE --- Deb (fast)
welcome to “world financial report.” i’m matt nesto, getting right into it with breaking news here. the bank of new zealand raises its key interest rate a quarter point to 6%, that, of course, coming just seconds ago. earlier today, crude oil futures in new york trades rose to a record high on concerns about supplies. yukos, the largest russian oil company, says the government there ordered a halt to production from its main siberian unit. a russian court is seeking to recover $3.4 billion in back taxes and fines from the oil company. the order forbids it from production units or forbids its prux units from selling any property. oil is still flowing, however, at a rate of 1.6 million barrels a day. the chief executive says rail shipments to china may stop next week because the company can’t access its bank accounts. shares have fallen now for three straight days. the stock has given back 65% this month as investors speculate that the company could be―could soon be bankrupt and see its assets sole. russia is the world’s largest oil exporter after saudi arabia. economists say high oil prices are a negative drag on growth. every $10 of price or every $10 price move in a barrel of oil can reduce g.d.p. by about half a percent. that’s according to the american petroleum institute. interestingly, we’re talking about the american petroleum institute and we did get their weekly supply data out today, along with that from the department of energy. i’ve got a chart here. it is going back to 1999. and what we had was actually a mixed data from the two―the two entities, the department of energy reporting that oil inventories actually rose. if you look closely, you can see that tiny little uptick in the white line in the d.o.e. data up 1.2 million to 300 million. a.p.i., the orange line, said their supply data showed a three million barrel decrease. the net result there leaving them at 298 million. now the big picture is we see both at 298 and 300 million. both if you go from a year ago back to here, middle of july, both would indicate supply levels up about 8.5% to 9% year on year. but clearly down since the recent peek that we hit in june. also on the energy beat today, the record prices, of course, are pushing profits higher. conoco phillips saying second quarter net income was up 75%. chevron texaco announcing a two-for-one stock split and increasing its dividend. and many are expecting that exxon mobil will do the same when it reports and su keenan is here with details. the same as in split or the same as in profits?

>> yeah. in the dividend. we shall see. with crude oil futures trading in prices never seen before on the new york mercantile exchange, investors are preparing for what may be exxon’s profitable three months on record. the company is clearly benefiting from the pass quarter’s increase in oil futures, up one third compared to a year ago. there’s also been the growing demand for fuel. the expanding u.s. economy has seen trucking companies, railroadses, airlines and motorists all spend more on gas and fuel. the numbers, exxon mobil’s profit expected to surge by one-third to almost $5.8 billion or 88 cents a share. chevron texaco is expected to post a profit of $2.72 when it reports on friday. deutsche bank’s paul fanke says while there’s been little growth in production at these companies, the boost in oil price is having an impact.

>> also because of very strong demand for oil, very, very high refining margins and you are seeing record profits yesterday from b.p., a very big number again from conoco and the other oils going forward.

>> let’s take a closer look at conoco. today they reported a 75% increase in second quarter profit. the nation’s largest oil refiner says it’s using the extra money to pay down debt and fund the exploration products in countries such as vietnam. conoco phillips earned $2.97 per share, as you can see, that’s four cents above the average analyst estimate. sales rose to almost $32 million billion. and while shares traded lower today, they have gained 16% year-to-date. exxon mobil shares have gained almost 12% so far this year. investors expect the company to follow the lead of its rivals in offering a dividend and buying back stock. yesterday after reporting its second highest profit on record, british petroleum did both, boosted the dividend, announced plan for a buyback. daryl hodges of hodges capital management, sees the energy stocks continuing to move higher.

>> in a market where there are not too many stocks going up and there seems to be a general melees in the market , i think just a good place to be is in oil stocks. and i think the likelihood of them finishing the year higher than they are right now is very good.

>> and while higher profits are expected this quarter and for the full year, many analysts and investors tell us earnings for energy companies are expected to be lower next year. matt?

>> i think exxon, it has been three years since they last split.

>> we’ll have that tomorrow.

>> good stuff. thank you, su. appreciate it. let’s give you if closing numbers on wall street today. what’s going to stand out in the mind of traders that lived through it is a comeback. 100 points in two hours brought the dow up .3%. the final two hours. so, you see the s&p little changed on the day. the nasdaq, though, struggling down .6%. volume at the big board a little on the light side, 1.5 billion down there or the nasdaq, similar story, a little bit higher, 1.8 billion shares. on to bonds we go, they were up today. weaker than expected durable goods pushing those prices higher. yields down 4.58% for a 10-year at five, 3.8% and the two-year will yields you 2.73%. that turnaround was done on above average volume today. deborah kostroun at the big board with details. an interesting day.

>> it certainly was. even though we started out the day a little bit negative and that, of course, on the durable goods orders came in less than expected. crude oil at record-high prices and even though crude oil was higher, transports also performing quite well f. you take a look at the transports and what led the transports higher, it was really the railroad stocks. norfolk southern, they reported earnings, had higher second quarter profit really aided by rising shipments. also, their main rival in the u.s., crfments s.x., they reported lower earnings because of delays and also a drop in income from their property sales. but actually both companies hauled more freight. if you want to take a look at an expanding economy, take a look at the railroadses to see how many things are transported. so, it looks like for the second quarter, the railroadses performing quite well. also, this leadses us into the cyclical stocks. the railroadses considered cyclical stocks and they performed quite well today and the railroadses part of that picture. and also u.s. steel. they got an upgrades today from prudential and prudential saying that u.s. steel is benefiting from steel prices this year. in fact, the s&p steel index coming in at a five-year high. also, media stocks on the losing end and that on time warner’s -- that’s the cyclical index. taking a look at the media index, time warner’s revenue actually rose on higher sales of its cable tv channels and film studios. helped by sales of the “lord of the rings” d.v.d.s and also their box office revenue from “harry potter and the prisoner of azkaban.” however, their second quarter net income fell 27% from a year ago. so, some of the media stocks, those were the second worst performers in the s&p 500 on the day. now the worst performer in the s&p, that was the s&p commercial services index and that was really led lower by allied waste industries. the allied waste is the second largest trash hauler. that stock falling, as you can see, almost 21% to their lowest level in more than a year. the company reported earnings and also a loss of $15.2 million for the second quarter. also four analysts cut their ratings on that stock. semiconductors, also we’ve been focusing in on semiconductors for quite some time. semis actually ended up the day, seeing the markets . the market trended upwards, so did semiconductors. l.s.i. actually fell, though, after the company said they will have a third quarter profit. however, that was less than some analyst estimates. but all in all, matt, many traders feel like it was a positive day. really coming on the heels of a very positive move yesterday. so, two days in a row in gains for the dow and the s&p. back to you.

>> thank you very much. i’ve got more headlines for you here, folks. we have s.b.c. communications is going to sell its stake in the illinois-indiana phonebook directory partnership to its partner, r.h. donnelley for $1.45 billion in cash. s.b.c. says it depm expects to net $850 million profit on that deal. how much of an impact is that oil price going to have on the economy? that’s what we’ll take up next with kurt carl.

Interview: A preview of A. O. L division
Federated Investments --- Kohler, Angela --- Analyst
>> yahoo is demanding more shares of google. the dispute stems from a partnership that the two internet companies formed four years ago. yahoo received stock options as part of an agreement to offer google’s search engine on its own website. yahoo stands to gain from google’s coming i.p.o., holding 5.5 million shares, worth some $600 million. the two companies are in settlement talks. their home headquarters are only five miles apart in california. for the second quarter, wall street expects time warner’s profit to hit 15 cents a share, the sixth straight quarter of profit increases at the world’s largest entertainment company. for a preview, we bring in angela kohler, global media analyst with federated investments, joining us from their headquarters in pittsburgh. thank you for joining us. your thoughts on this, 15 cents a share tomorrow, the big number. but this is, of course, a multimedia company. what division, what number in particular will be the most telling for us tomorrow?

>> i think investors will continue to focus on the key a.o.l. division. that’s been their trouble spot and we need to see they can grow their way out of this, that the subscriber losses in the core division won’t hurt growth going forward and that needs to be offset by growth in the access division and international growth.

>> if you look at the total revenue picture, time warner forecast to do about $10.4 billion in total revenues for the quarter, down from $10.8 a year ago. so the revenue slide continues. do you see that ending and why?

>> i think it depends on which division you’re looking at. their cable networks have done extremely well. cbs has picked up rating share and hbo has done well. you also have film entertainment with one hit after the other in that division―“lord of the rings,” and “harry potter” and more to come. they have been offset by weakness in a.o.l. and publishing. it’s a mixed bag right now and not the best growth story in media but media across the board has had troubles this year. it’s how much management can find ways to get out of the trouble spots.

>> what do you think of the overall media sector? do you have a favorite player in the group and if so, why?

>> we prefer names like disney. we like news corp. a lot. we think those names can outgrow some of the trouble in media overall because of unique things about the companies like the disney theme parks. at news corp., several of their businesses internationally are doing much better. overall it’s a great place to invest. the entire group has been beaten down this year and we’ve had lower valuations as well as a great second half, fortressed by increased political spending, the tight presidential election, helping political advertising spending and the olympics, firming up pricing for television stations in the third quarter.

>> if you look at time warner year to date, the stock is down 8%. compared to the s&p media index, down 13%, it’s outperforming. underperforming the broader market . so you suggest this might be a buying opportunity? would you buy ahead of the news or after it?

>> we’re not big fans of time warner in general. it’s done ok year to date because it has less advertising exposure, names like viacom and news corp. or radio names that are beaten down. the reason they’re beaten down is we’re uncertain about the economy, whether it will come back and if so, how quickly. time warner doesn’t have that exposure with publishing and a.o.l. and cable operations. but if you get a recovering economy, the stock will lag without that boost.

>> by every indication we do have a recovering economy, but do we have recovering ad spending? and it’s a big year for tv stations with the olympics and the election.

>> absolutely right. the olympics always firm up pricing about that time and we see pacing numbers that respect that, especially with the halo effect. presidential spending is huge. we have companies with a large presence in the swing and battleground states and we’re bullish on those stocks, as well.

>> the overnight ratings for the big three broadcast networks were pretty weak. a rerun of “”c.s.i.” miami” doubled what they dook―took at cbs for the convention coverage.

>> that’s an important thing for me as as a media investor, we have a tight election and they have to keep spending and contributions keep rolling in from the deep pockets. we want a lot of spending on the battleground states. that spending will happen on nbc, cbs and abc. we’ll look for good numbers in the third and fourth quarter with those owners.

>> angela kohler, appreciate you coming on. as we said, consumer confidence rose rose more than expected, almost to a two-year high. we’ll look at the double c of the economic world, consumer confidence.

在线播报
Listen Market briefing --- Mate (slow)
NYSE --- Deb (fast)
U.S. Food services --- Allan (slow)
welcome to “world financial report.” i am matt nesto. four of the seven largest cable tv operators are going to report earnings this week. the world’s largest, comcast, expected to report a net income of 10 cents a share compared with a loss of a penny a year ago. sales expected to climb 9%, helped by sales of high-speed internet access. sales of more profitable high-speed internet services are expected to help comcast boost second-quarter revenue after the company dropped a takeover bid for disney in april. merrill lynch analyst says comcast’s web access service is its fastest growing and most profitable unit, accounting for 15% of total sales and she expects the broadband sales to rise 35% on the quarter. she rates the company, comcast, a buy. comcast is competing with phone companies such as verizon and s.b.c. to sell slower digital subscriber line connections at lower prices and analysts say comcast customers are willing to pay more for higher speed web access. comcast high speed service is $16 more and twice as fast as s.b.c.’s phone-based connection. still, not every consumer chooses speed. shares of comcast and other cable providers down 14% this year on concern that competition is mounting from phone companies.

>> we think the relatively strong numbers out of comcast and other cable operators will change the sentiment for the space and we expect to see the stock move after the q-2 result.

>> in may, comcast chief executive told investors his company doesn’t need disney to increase profits and his company can offer new services and improve profits. some analysts say comcast may have to expand discounts to attract the 84% of cable customers who don’t have high-speed access. we’ll preview time warner earnings with federated investment global media analyst angela corel coming up later in the program. the numbers, a big story today because they were up for the first time in three. the dow above 1000, 1.25% higher, the s&p and the nasdaq higher today. volume returned, too. check it out, 1.6 billion shares on the nyse. it was a rebound day on wall street, turning around two days of losses into a big gain and bounce off the bottom. deborah kostroun with a wrap.

>> the s&p 500 and dow jones industrial average both posting their biggest gains in about seven weeks after seeing the lows from yesterday in the s&p 500. and kind of a couple of things that helped the market rebound. we had a couple of things going on―consumer confidence surging to its best level in two years. not only consumer confidence, but we also had earnings reports coming in better than expected, especially from verizon. you can add pulte to that list, as well, on the better-than-expected earnings. telecom, the best performer in the s&p 500. also for the month, as well as this quarter. and the telecom names, verizon, second biggest gainer in the dow jones industrial average after their earnings did better than expected. also, consumer confidence leading retail in today’s session. retail, the biggest gainer in the s&p for the day today and retail performing quite well. that was on the fact that consumer confidence at its best level in a couple of years. we had so much concern about retail, especially as the june retails declined 1.1%. looks like july, we are possibly in kind of a rebound mode and so that helping out retail. homebuilders getting a lift mainly as new home sales fell less than forecast. also pulte homes increased their forecast. a.i.g., the biggest gainer in the dow, not a lot of news there. chubb released earnings after the close of trading and said second-quarter profit climbed 41% as premiums and incomes rose.

>> we’re getting headlines crossing from peoplesoft in the news an awful lot lately from the approach by oracle. here’s the numbers. 14 cents per share, that met expectations. the revenue at $647 million. another headline is that the company is seeing its licensing revenue at $130 million. peoplesoft’s second-quarter licensing revenue at $130, total revenue at $647 million. reaction in the marketplace today showing the shares trading down by 40 cents, closing at $17.32 today, about a 2% to 3% decline. that said, other news today, four former executives of a u.s. subsidiary of royal ahold are being charged with securities and conspiracy fraud in connection with a plot to inflate revenues by more than $800 million. federal prosecutors in new york made public the indictment of two former top executives of u.s. food service, a subsidiary of ahold, the second largest food wholesaler in the states. prosecutors say two other former officials pleaded guilty in the last two business days. joining us now is allan dodds frank who was at that press conference and he has details. allan?

>> the fraud that involved the former top executive of u.s. food services involved falsifying by hundreds of millions of dollars the promotional fees allegedly received by the company from food manufacturers.

>> the case against the u.s. food executives boils down to an earnings management scheme through which the defendants and others falsely inflated u.s. foods’ earnings by hundreds of millions of dollars through an artificial reduction of u.s. foods’ cost of sales.

>> prosecutors said the scheme added $800 million to the earnings of netherland’s ahold. the 2000 through 2002 u.s. food service contacted―accounted for substantial earnings for royal ahold. royal ahold stock lost $6 billion in market cap. michael resnick, former chief financial officer of u.s. food service, and mark kaiser, former executive vice president for sales, were indicted for conspiracy, securities fraud and making false statements to the s.e.c.

>> according to our complaint, the defendants manipulated income, accelerated income and in some instances simply made it up. when questioned about the income, they lied.

>> prosecutors say that the former executives lied to auditors and to the parent company, royal ahold, about the scheme. pleading guilty earlier were timothy lee, former executive vice president for purchases at u.s. food services and william carter. peter marion, an outside supplier to the company, was indicted on 13 counts in connection with an insider trading scheme, charging he illegally made more than $360,000 after being tipped by lee that the columbia, maryland-based u.s. food services would be acquired by ahold in april of 2000.

>> accounting fraud, inside trading, filing false statements, obstruction of justice, conspiracy. this is a litany of criminal charges which have seemingly become an accepted business plan for much of corporate america.

>> the two former executives who pled guilty are cooperating with prosecutors and the investigation is continuing.

>> i want to update folks as i mentioned peoplesoft shares were trading lower. they have pulled back to unchanged now. that one tick down 40 cents or so has proven to be a rogue trade. it is now up a couple of pennies from its close after reporting second-quarter report that -- profit that matched and revenue just under expectations. profit at time warner expected to rise to 15 cents a share. we’ll speak with an analyst about time warner next.

Interview: Energy cost
Sunoco --- C.E.O. --- Jack Drosdick
>> crude oil futures fell today on speculation opec could soon be pumping more oil. prices rose to an eight-week high last week on concern of low inventories and fears that russia’s yukos could go bankrupt. the price today down .6%. also on the oil front today, sunoco capitalizing on the gap between crude oil costs and gasoline prices. in the second quarter, that gap widened to the highest on record and the company’s profit nearly tripled. earlier, brian sullivan spoke% with sunoco’s c.e.o. jack drosdick about energy costs and the outlook for his company.

>> gasoline hab up―has been up quite a bit, 3% to 4%, contributing to our better bottom line and higher gasoline prices.

>> are you surprised the demand has been so strong given the fact that gasoline in much of the country, especially the northeast, is at or above $2 a gallon?

>> we were a bit surprised but i think if you look at last year, it was a rainy year in the northeast and that may have something to do with it. a little bit better driving conditions. but we were surprised by the strong growth in gasoline. we were especially surprised that even the high prices didn’t curb demand.

>> let’s talk about why the prices may be high. is this a demand-driven scenario or a lack of supply-driven scenario for high gas prices?

>> i think it’s a little bit of both. definitely without the demand, we wouldn’t have the kind of results and prices we have but with the tightness in crude supply and refining capacity, all brought on in part by the high demand, we’re just in a very tight situation and when you overlay on that the uncertainty in the middle east and the like, there’s a little bit of price in there for protection against an interruption, either in refineries or in the crude supply.

>> are you optimistic enough in retail gas demand to to be to -- continue to buy up service stations?

>> yes, we are. we’ve been buying up stations in bulk and taking the least profitable stations and selling them to smaller concerns and it’s working well for us.

>> are you going to be at a net add of gas stations this year, selling off weaker-performing ones and buying new ones?

>> absolutely. while selling off the ownership of some of the stations, in all cases so far the stations have stayed with us and continue to sell gasoline. it’s just that we don’t own and operating them, they’re owned and operated by third parties.

>>ure optimistic enough not only about retail gasoline demand but your business in general to boost revenue and e.p.s. estimates at this time?

>> we don’t―we let the analysts look at what our estimates might be. i believe as the analysts look at our results and those to be announced going forward, they’re already optimistic about our businesses but we would hope that as time goes on, they’ll continue to be optimistic and increase their optimism.

>> you can see a time in the next six months when refineries will not be running at 100% capacity?

>> i really can’t. i think the game for refining is to continue to run at maximum capacity, which we were able to do in the last quarter. with these high margins, to look for ways to produce more, which is the good side of the high prices. the high prices will bring on more supply in my mind.

>> that, of course, was the c.e.o. of sunoco speaking with brian sullivan. boise cascade is going to sell assets and change its name to officemax. the company says this completes its transformation from an industrial company into an office products business. its paper and timberland assets will go to slowly--- closely-held boise cascade for $3.7 billion. boise will take the officemax name this fall. officemax is currently the nation’s number three office products retailer behind staples and office depot. shares of tyson food with their biggest drop this year after the company said that earnings this quarter may fall. the world’s largest meat processor says bans on u.s. chicken and beef hurt exports. tyson says fourth-quarter profit will be below the 42 cents a share earned last year. earlier today, tyson said profit last quarter more than doubled from higher prices of chicken and pork. high protein, low carb diets helping boost demand for the meats. shares down 7.4% today. another food company out with earnings today, kellogg, saying that higher sales of low carb cereals drove profit higher. they earned 57 cents a share, three cents better than estimates. shares of kellogg closed higher by 1.3% today and have gained more than 20% in the past year. american express says the economy expanded and so did its profit. we’ll look at the numbers at amex, a member of the dow, up next.

在线播报
Listen Market briefing --- Mate (slow)
Goodle --- Bob (fast)
NYSE --- Deb (fast)
Verizon --- Reporter (slow)
welcome to “world financial report.” i’m matt nesto. topping our news, google, a price range finally set. the company behind the most-used web search engine says it plans to raise as much as $3.3 billion in its initial public offering. bob bowden has been tracking that story and has details. bob?

>> thank you. the news broke at about 9:00 a.m. this morning, new york time. an s.e.c. filing showing google will sell 24.6 million shares to investors for a price of between $108 and $135 a share, an i.p.o. value in the range of $2.7 to $3.2 billion. google is only selling a 9% stake to investors. this pricing action values google’s overall market cap, therefore, between a range of $29 and their 36 billion. it’s useful to compare google’s valuation to yahoo. the $39 to $36 -- $29 to $36 billion valuation is within striking distance to yahoo’s $37 $37.5 billion value. both companies more than doubled their revenue in the first half of the year compared to the year before with yahoo’s revenue growth larger than google’s, as its revenue number and market cap, higher than the google figure. an i.p.o. attorney who has helped in i.p.o.’s of broadcom and geocities says google is a solid company selling shares at a high price.

>> these are some big numbers and that’s a huge valuation and numbers we haven’t seen in quite some time. i think there will be incredible scrutiny from wall street on this company. but it’s a market leader with dominant technology and hot management team. i think it has staying power.

>> google did not say when its dutch-auction-style i.p.o. would be held. it plans to list the class a shares on the nasdaq under the symbol goog. the company has stated it expects profit margins to decline as growth slows it and it invests in product development. it plan plans to acquire a company that makes software for organizing and storing digital photos. new services will be critical for google, according to one portfolio manager. he says that’s because slower growth in internet advertising is likely.

>> i think it can only be natural that yahoo and google will see some deceleration. it’s been a great advertising climate in the past six to 12 months for internet advertising. you have the election and sports advertising on the internet. there’s pricing pressure to the upside for those using advertising on the internet. i think there will be deceleration in the growth rate.

>> checking shares of yahoo, they’re up 24% year to date. they had been trading lower earlier in the session but have fought back to edge a two-cent gain by the end of the regular assassination an hour ago.

>> i just looked up. bob bowden, 9100 hits when you google yourself. interesting statistic. let’s give you the closing numbers today. if we look at the markets , little changed. the dow statistically unchanged, almost the same for the s&p 500 and nasdaq, the worst of the three, down a full .5%. on to bonds we go, down a surpriseing increase and continued strength in the housing market , yields pushing higher. the dow and s&p ended almost unchanged today. it was choppy throughout. deb kostroun was there at end and has details.

>> we didn’t klez on the lowest delve of the day, near the unchanged level. the big concern is that earnings will slow in the second half of the year. we know second-quarter profit as we finish up the earnings in the s&p 500 companies, likely up 24% and third-quarter profit up 14.8%. that, a dramatic downward trend from the second to third quarters. we also have the g.d.p. report coming out on friday, likely to show a slowdown in the second quarter, especially compared to the first quarter. also, the major averages as we close, technically weak, below the 200- and 50-day moving averages, not only on the dow and s&p, but also the nasdaq. telecom, the best performer in the s&p 500 today. bellsouth, the third largest local telephone company, they said second-quarter profit coming in a little bit better than analysts estimates. talk that at&t might be up for sale according to “newsweek.” as we look at are the areas in the market , focused on crude oil. although crude oil in the $41 to $42-a-barrel area, it was lower today, but oil services performing well. pharmaceuticals, a large drag on the market . schering-plough at a 52-week high, however. glaxosmithkline report earnings tomorrow. the food and drug administration approving merck and schering-plough’s vitorin, a combination of two medicines and the companies say could be more effective than pfizer’s lipitor. pfizer, lower on all that news. back to you.

>> thank you very much. moving on now to verizon. the company may post record mobile phone sales in the second quarter, the largest provider of phone services in the u.s. expected to announce that sales at the mobile unit increased 21%, according to analysts’ estimates. profits, however, probably fell to 60 cents a share down from 69 a year ago due to a drop in revenue from the fixed-line business. joining us now is our bloomberg news reporter with details and a preview of what’s on tap for tomorrow. so the number is up for a decline, but increase continuing the pressure and importance of the mobile phone verizon wireless unit.

>> right. the mobile phone revenues are expected to go up 21% according to analysts whereas the fixed-line division’s revenues are suppose to drop 3.1% and that continues the trend we’ve seen of big local phone companies such as verizon losing revenue from that latter business while the mobile phone revenue gains and in the case of verizon, it’s a real powerhouse.

>> what are we expecting verizon to say to explain their results tomorrow?

>> what they’ve said in the past is they’re adding customers due to their reputation. they like to say how many awards they’ve won and customers they’re adding and people are signing on to services and still benefiting from a u.s. government rule that was instituted back in november that allows people to keep their phone number when they switch from one cell phone carrier to another.

>> is that part of the reason why verizon―that wasn’t only them that was able do the number portability, but what is the reason behind the fact that they’ve added 1.5 million subscriber that’s wireless division?

>> it’s a combination of having the reputation among consumers, getting the wireless number portability rule instituted and being in front of competitors in that and having a competitive product offering and not having the bad news that some of the other carriers have had, such as at&t wireless, which had some problems with its billing software and systems and that sort of thing.

>> just for the record, remind us who verizon’s partners are in its wireless operation.

>> verizon wireless is a joint venture with 55% owned by verizon communications and the other 45% owned by vodafone group p.l.c. of the u.k., the world’s largest operator of cell phone service.%

>> if i recall from my time in london, one of the 100 million subscribers. finally, scott, what are the quarterly profit numbers analysts are looking for exactly.

>> it’s looking for about 60 cents per share in the quarter compared to 69 cents in the year earlier period because the fixed line business is still declining and the mobile phone numbers are not rising fast enough to make for an overall revenue increase.

>> thanks, appreciate you joining us. that’s on verizon due out tomorrow. sunoco’s profit nearly tripled. we’ll hear from the c.e.o. on what’s next for this oil company company.

Week preview --- Paul (slow)
Asia Pacific --- Gino (slow)
>> among the highlights, daimler-chrysler, b.p., shell, deutsche bank, glaxosmithkline. by friday more than half the companies in the dow jones stocks 50 european index with reports a good indication of where corporate profits were headed. oil grabbed the headlines. crude oil future at or above $40 a barrel. and there are problems at ukos and there is no sign that strong demand or other capacity shortages are going away. b.p. and shell report both on thursday, plus in the u.s. we complete the big three with exxonmobil. also on thursday, b.h.p., the world’s biggest mining company, has production figures out. merrill lynch has said these companies’ stock could rise up to 20% over the second half boosted by continuing demand from china. on monday, fiat’s net loss is expected to have widened. thats a down prince cally due to the cost of reorganization. that is likely to herald another week of mixed fortunes. later in the week, peugeot, renault, and daimler-chrysler report. as well as on monday, we have the mobile tell com italia. and in the u.k. itself, aggregate industries and pearson and reckitt. and the second largest bank will probably say profit rose 2.6% at bbva. and bb v.c.r.a’s return to operating profit this year by improving sales of credit cards in mexico and mortgages, all company loans and insurance. and second quarter earnings from farmer, advanced vision, and wincor. quite a week in europe.

>> paul george in the london bureau.

>> meanwhile, shaping up to be a busy week in asia. for a preview of the action, we go to our tokyo news room.

>> in the new week in the asian pacific region on monday, they release export growth probably picked up in june for china. out on wednesday are australian consumer prices. it probably rose 0.6% in the second quarter from the previous three mostly sunnies with an easing of drought conditions lowered food prices. and the rising dollar reduced the cost of imports. obon thursday t new zealand fed governor may raise it to 6% as consumer spending boosts the economy and inflation accelerates for the top of the 1-3% target band. also out on thursday are factory production that gained for a third month in june as exports surged. japan releases industrial production figures on thursday. production probably rose according to the median forecast in a bloomberg survey. companies are boosting production to meet rising demand at overseas for flat panel televisions and other digital product. australia ya will report its trade balance numbers for june. it may have narrowed as companies like excel and other benefits from rising prices and stronger demand. and friday a number of data out of japan for the jobless rate for june. it probably fell nationwide in june. some of the corporate earnings out in the new week, japan’s biggest chip maker will probably say profit rose in the first quarter. mobile phones and other electronic device mace still demand semiconductors. on thursday the world’s third largest mining company rio tinto may say a 50% gain in first half profits has benefits from higher prices for commodities such as iron ore and coal. asian automakes like hyundai and nissan report earnings in the coming week. nissan, japan’s second biggest car maker l announce quarterly results for the first time. and korea’s hyundai bay post a drop in income because of higher costs of steel and marketing expenses. on friday t world’s second largest mobile company will probably report a first quarter profit decline for doco mrk o. and that is a look at the week ahead in the asia pacific region. now back to you.

>> gino tanny. relations between the national hockey league and the players union have been on ice for most of the summer. will they be able to come to a thaw and reach the labor agreement? stay tuned. we’ll have money and sport whence we come back on the “world financial report.”

在线播报
Listen Market briefing --- Mike (fast)
Xerox --- June (slow)
Nasdaq --- Bob (fast)
>> welcome back to “world financial report.” i’m michael mckee. it was a down day all around with the dow jones industrials down 88 points. the s&p 500 down by about 11 and the nasdaq finishing lower, a two percentage point ton loss for the day. checking thresh rist, they close out the week on a bit of an upnote, but down for the week as a whole. the 10-year is trading at about 102.16. that is a 2/32 gain. the yield down one basis the point 4.43%. the five-year barely changed on the day, the yield 3.67%. the two-year unchanged oen the day yielding 2.65%. the dollar on the day was higher against the major trading parter? s finishing up against the euro. profits up at xerox as say that they report second quarter results and raises the forecast for the year.

>> xerox is use loger costs and sale of higher margin products to more than double second quarter profits. is and equipment sales who in the last two years has trimmed expenses, paid off debt, and cleaned up accounting practice. she has cut 17,000 jobs and hired other companies and sales of the digital products increased 4% in the quarter and now represent 3/4 of the revenue while revenue from color copiers rose 17% and represent about 1/4 of total revenue. net income of the second quarter more than doubled to $208 million or 21 cents a share. that beat the 17-cent average estimate that analysts were forecasting. revenues fell almost 2% to $3.85 billion. stanley nabi, the vice chairman of silvercrest asset management says revenue at xerox is what concerns them, though he is impressed with what the job they have done, “pulling the company away from the brink.”

>> what is of concern to me is that the revenues are not growing, or certain levels, as fast as i had hoped they would. for instance, in the service area and the finance area, earnings were down in the latest quarter. so this company needs a little bit more momentum in revenue.

>> xerox raised the forecast for the year to at least 80 cents a share, more than the 73 cents average estimate of analysts. they spend about $1 million a year on research and development. some of xerox’ new equipment have as much as 40% fewer parts. that makes manufacturering them cheaper and maintaining them easier.

>> all right. thank you. the nasdaq composite index fell for a fourth consecutive week today. bob bowdon has a wrapup of the action from the nasdaq market site.

>> the nasdaq composite index falls to the lowest close of 2004 so far. it was down 2% ton day. and now down 7.7% year to date. some of the stocks driving the nasdaq down include microsoft down 3.3%. the company issued a forecast for fiscal year 2005 of only $1.21 to $.24 a share. investorsn’t exed $1.35 3/4 as well. amazon.com shares down 13% on the day. they said their profit mixed expectation and the chief investment officer at solarises a et management says amazon is where they have high expectation and priced it for perfection and expect earnings and sales to meet street expectations if not exceed them. doubleclick down 28% ton kay da pi the company issued a forecast saying earnings would be only 13 to 17 cents a share against analyst expectation of 25 cents a share. so the range―the low end of the range there almost half of what analysts had expected for doubleclick’s full year. moving on, amgen shares down 1.3%. this outperformed the nasdaq, which i said fell 2%. amgen came out with revenues and earnings slightly above expectations and sales of the anemia drug almost doubled to $617 million. flextronics shares, though, now we have back to the stocks performing much worse than the market at large. the company said it will sell 24 million shares of new common stock in a public offering that amounts to about 5% of the existing common shares to dilute the earnings per share potential of existing flextronics shares. wanted to get to one winner ton day. yellow roadway up 4.5%. the company issued a full-year earnings forecast of the $3.70 to $3.75. analysts looking for $3.31. also t company raised the third quarter earnings forecast. that is it from the nasdaq. back to you.

>> bob bowdon. the economic expansion may not be generating inflationary pressure. that is the word from chicago federal reserve bank president michael moscow. in a speech this morning to chicago business leader, moscow said tame inflationary pressures are allowing the fed to stick to the plan to raise interest rates at a made pace. he echoed fed chairman’s alan greenspan’s promise that the central bank will “move aggressively if they see the economy begin to overheat.” the current accommodative policy is, in his words, not appropriate going forward. the fed’s next policy meeting is scheduled for august 10. the u.s. cattle herd fell to the lowest in at least 31 years. it declined for a ninth year as record calf prices and drought in the northern plains encouraged ranchers to sell animals rather than keep them for breeding. the cattle herd, which is the broadest measure of u.s. beef dropped to 104 million head as of july 1. the herd at mid year was the lowest level since the usda started tracking the figure in 1973. when we come back, we will preview next week’s action in europe and shea with our own bloomberg market specialist. stay with us.

Earnings --- Su (Fast)
SBC --- Danielle (fast)
>> we are approaching the halfway point of earnings season with most companies so far posting profits meeting or beating analysts estimate. technology, though, has been the exception. bloomberg’s su keenan takes a closer look.

>> with the broader market closing lower for the sixth straight week due in part to investor concern over earnings, it’s possible to lose track of the big picture. in the words of the director of research at zaches.com, a data gathering firm, second quarter earnings have been fantastic.

>> it’s actually 70% of the s&p 500 companies that have reported so far have exceeded estimate. 20% have come in in line. 90% meeting or exceeded. what is disappointing is the technology are starting to warn about the upcoming quarters that maybe they’re not going to meet them.

>> and of course t latest example of such disappointment, microsoft’s outlook. as we have reported, the software company says a drop in investment income will hurt profit this is year. a.g. edwards chief strategist says that many investors expected the early cycle recoughry in tech to resemble the 1999 boom. he sees fund managers adjusting portfolios to reflect the best valuations.

>> and valuations are a little bit better in some of the more defensive sectors of the market . so the highest valuations tend to be in the more cyclical segments of the market and that is where you are seeing some deceleration and earnings growth. a little bit more inflation and slower earnings growth. we think the s&p will show us 13-15% earnings growth the last half of the year versus the 20% plus the first half.

>> on that slowdown in earnings, u.s. trust cheap informsment officer does not think earnings will slow to tex tent of the recovery.

>> we are advising clients right now to lean into the wall of worry you talked about because the underlying earnings picture going to shine through. granted, there is an awful lot of concern. investor sentiment right now is very negative. cash is built up in accounts generally. but we are emphasizing this and we think that the market , both s&p and dow, are likely to be up modestly by year end.

>> and we end on the bullish note. back to you.

>> bloomberg’s su keenan. well, going from the week that was to the weeks ahead for corporate earnings, u.s. phone companies are one of only two industry groups prepredicted to report earnings next year. after s.b.c. this week showed the first sales gain in 15 quarters. the shares have been the worst performers in the s&p 500 since the start of last year. investors say the group is finally poised for a rebound. for some detail, let’s welcome bloomberg stocks reporter danielle sessa. what is going on in the phone exeaps? is it simply a matter whoof goes down can’t go down forever? or is there solid business reasons?

>> everyone knows it earnings growth is expected to slow for whole market . the telephone stocks are one of the few groups moving in the right direction. this year they are expected to have a 15% decline in earnings and some investors think this is the bottom and can’t get any worse. next year they are expecting 1% growth. and they are moving in the right direction. analysts and investors think that phone stocks may start to participate in the rally and also, another thing that makes the stocks attractive and are getting investors enthused about them is the dividend yield. they have the second highest dividend yields as a group in the s&p 500 s&p. and in the market where maybe it’s going side waist or falling, a big amount of the return will come from dividends.

>> what about at&t and their decision to exit the residential long distance market , residential service. that’s got to help these guys.

>> as you noted before, the u.b.s. analyst upgrading shares of the other baby bells because of less competition in the industry. and also with s.b.c. reporting the first quarterly sales gain in 15 quarter, that is a sign that things are getting better. they are making some strides with getting customers to sign up for the d.s.l. internet service and also verizon announcing they will have internet phone service to help compete and keep customer.

>> reporting better results for verizon and bellsouth next week. what is expected from this?

>> bell south is supposed to have little change in frernings a year ago. verizon is supposed to have a 13% drop. and this is wake baked in. this is what we know and the thinking next year that thing wills start to improve.

>> any particular one of those baby bells, as they still call them, even though they’re big, that stands snout.

>> investors seem to favor verizon with a hire dividend yield and also because of the wireless business. that is a big component comprising 40% of the revenue while maybe growth won’t be so great on the wire line side. the wireless side is a momentum and is growing.

>> who is the laggard?

>> the laggard is at&t. it has the highest dividend yield in the group. analyst and investors are concerned about the prospects for the company, so we’ll see what happens.

>> ok. thank you very much. bloomberg’s daniel sessa. well, goldman sachs wants to know what job creation slowdown? the number of jobs created in the u.s. was a bit lower in june, but the economists at the goldman sachs firm are raising their forecast for job growth this month. we’ll take a look in the chart of the day.

在线播报
Listen Market briefing --- Mike (fast)
NYSE --- Deb (fast)
Martha Stewart --- Allan (slow)
>> welcome to “world financial report.” i’m michael mckee. the dow joneses leading the major indexes down on the day with the dow down 88 point. that is a loss of almost .9%. the s&p 500 finished down by almost 11. that is almost a full percentage point loss. the nasdaq the biggest loser ton day. two percentage points down. 39 points, almost 40-point loss for the day. volume ton new york stock exchange, 1.3 billion shares. that’s just a little bit below average trading recently. not bad for a friday. the nasdaq trading volume 1.7 billion shares traded. taking a look at the broader market indexes t new york composite down by 67 points, a percentage point lost. the amex finishes down .9% at about an 11-point loss. and the russell 2000 small caps a 1.3 loss. they are down by seven points on the day. taking a look at the broadest market measure t wilshire 5000 finishes 110 points down on the day, a percentage point loss there. checking on the fixed income market , not a lot of action, although bonds did complete a down week on the prospect of higher interest rate. the 10-year treasury note is about about 1/16 on the day. the yield falling a basis point to 4.43%. five-year notice ton day were up about 1/16 as well. another basis point lost to 3.67%. no change for the two-year note on the day. the yield unchanged at 2.65%. taking a look at the dollar, it completed the first up week against the euro in some time and also finished higher against the japanese yen and the british pound. the dow, as we said, closed below 10,000 for the first time in two months. what’s next for the markets ? deborah kostroun is at the big board. she’s been talking to traders about that possibility. deb?

>> well, mike, a lot of concern is about where the dow is going to be heading, especially next week because closing below 10,000 for the first time since may 23. but it looks like one of the dee r key levels that we are looking at is 9906. that is the lowest level of the year in the dow. we hit that on may 17. getting below that certainly would be very critical. we didn’t hit that today. a lot of concern if we get below the level that we could be in the 9600 or 9700 area according to labranche specialists. a lot of concern about earnings coming in and the guidance has been disappointing, especially for the second half of the year, and that is one of the things leading the market lower. also t dow and the s&p near the lowest level of the year as we just mentioned. also, the dow once again fifth week in a row it was lower. the s&p for a sixth week in a row lower. a lot of that is is on concern about earnings and what we’re expecting for the second quarter earnings growth and still up about 24%. if you kind of take a look at what we saw in the first quarter, we saw earnings growth of 27.5%. so for the fourth quarter in a row, what we’re looking at is earnings growth above 20%. it starts to slow down in the third quarter and the fourth quarter. that is one of the reasons we have the market really kind of coming in here. also, we had 62 new 52-week highs and well over 300 -- 348 new 52-week lows. that is a trend we have been seeing for the past 12 days. more new lows in this market than highs. it really kind of tells you the downward kind of downward pressure we have been seeing in the dow jones industrial average. also, talking with peter henderson of fleet specialists who says we’re going to be looking at crude oil next week. also a lot of concern with democratic national convention getting underway. back to you in the studio, mike.

>> deborah kostroun. xerox is hoping to copy a strong second quarter through the rest of 2004. the company raised the full-year forecast after reporting profit more than doubled last quarter. cost cutting allowed xerox to sell new products at lower prices to compete with rivals cannon and hewlett-packard. xerox also sold more products with wider margins such as color cop yers an printers. share of xerox finished up on the day by 49 cents at $13.80 a share. we’ll have details of the company’s full earnings report in the next half hour. another chapter closed in the martha stewart case. douglas faneuil t former stock brocker’s assistant, who became the government’s star witness, was sentenced this morning in federal. allan dodds frank was there and he is joining me now with the details.

>> mike, u.s. district judge cedarbaum gave douglas faneuil no prison time and fined him $2,000 payable in installments. the judge gave faneuil “enormous credit for becoming the prosecution’s star witness against martha stewart and his former boss, stewart’s stockbroker, peter bacanovic.” faneuil told the judge how hard it was to turn on bacanovic who faneuil described during the four days of testimony as the best boss he had ever had. on december 27, 2001, bacanovic instructed faneuil, then his 26-year-old assistant, to tell martha stewart that another client, imclone systems chairman sam waksal was dumping the company’s stock. after sticking with the cover story concocted by bacanovic, for months faneuil in june 2002 decided to tell prosecutors what had happened. reading a statement in a shaky voice to the judge, faneuil said “i should have listened to my gut feelings. instead, i suppressed them. in the months that followed, i should have offered the candor and honesty that are owed to the u.s. government and to all decent people by refusing to cover up a misdeed.” in a letter to the judge, the prosecutor described why the government was urging leniency for faneuil. the prosecutor said he also knew his crimes would probably never be uncovered if, like martha stewart and peter bacanovic, he chose simply to stick to the cover story. after the sentencing, faneuil hugged several family members before leaving the courthouse. greeted by a media crowd outside in the rain, faneuil and his attorneys left without comment. as the prosecutor noted, faneuil has been barred from the securities industry. he now would be eligible for reinstatement if he chooses to go back into the business.

>> any indication if he would?

>> right now he seems to be happy working in an art gallery.

>> all right. thank you very much, allan dodds frank. an 8% drop in coca-cola’s share price was the largest in 21 months. down $3.80 to $45.17 a share. the world’s largest soft drink maker says expense wills rise more in the year. lit spend more on marketing the low carb c2 cola. in the last quarter, the global volume rose only 1%, short of the 5% annual gain. pepsico had a 10% increase in the beverage sales last quarter. coke’s total revenue rose at the slowest pace in two years, missing the average analyst estimate. share this is year have dropped 11%, while pepsi’s stock has climbed 9%. shares of maytag were sharply lower today after its slashed its forecast. they closed down $2.07 at $19.21, the biggest drop in more than a year. the nation’s number three appliance maker says net income will fall this year to as little as 20 cents a share. in june, maytag had forecast annual income will exceed $1 a share. the company lost 52 cents a share in the second quarter compared to a year ago profit of 32 cents. maytag, which makes products including the hoover vacuum, says the high cost of steel drove costs higher. the parent company of united airlines has secured half a billion in financing after failing to win a request for a government loan last month. the bankrupt u.a.r. also says it will pull off nearly $600 million in pension contributions. united hopes the latest finance willing allow the airline to exit bankruptcy this year. the company says for that to happen and to insure further loans, more cost cutting and restructuring will be necessary. at&t and other phone companies may be catching a break. people familiar with the situation say for six months the f.c.c. will freeze traits on local lines paid by companies like at&t. at&t rents lines from local carriers including verizon and s.b.c. in march they struck down rules to force the companies to rent the lines at a discount. during the freeze, the f.c.c. would try to adopt new regulations to replace those rule. the six-month freeze is a temporary win for at&t, which yesterday said it would retreat from the residential business because regulatory changes make it too expensive. the local carriers are baby bells who were higher today. a u.w.s. analyst uped the group saying an exit from at&t would less competition and increase earnings. investors were disappointed by microsoft’s and coke’s earnings. the companies still to report earnings include time warner, exxonmobil, and lockheed martin. when we return, we’ll have an earnings score card.