朗读练习作业

J.P. Morgan --- Carol Massar
>> shares of j.p. morgan climbed today after second-quarter earnings beat analysts’ expectations. j.p. morgan earned two cents ahead of the average analyst estimate. factoring in $2.3 billion to cover legal cost, j.p. morgan lost $548 million, or 27 cents a share. the chief financial officer discussed the firm’s legal costs with carol massar.

>> take years to resolve and we will learn more facts which could be better facts or worse facts relative to what we know today so there is no way i can give you assurance that that is absolutely all. it could be more. it could be less. that represents our attempt to scope it, to bound the financial risk associated with what’s out there.

>> jamie dimon didn’t want to give a forecast but tried to give some guidance to analysts. what are your biggest concerns as you look at the business? i know trading was tough in the last quarter. investment banking fees helped offset that. what are your concerns and worries?

>> what we are totally focused on as a management team just now is on executing the merger. i don’t see any underlying business trends just now that are reasons for concern.

>> even rising rates?

>> even rising rates. overall, the rising rates are associated with a stronger economy and there is no doubt in my mind that we have a better -- a better outlook for the firm as the economy improves. so are there businesses that do better and businesses that do less well as rates rise? absolutely. i highlighted the mortgage business, for example, will be weaker as rates rise. on the other hand, there are parts of the business that do better as rates rise, for example, we ought to be looking at the somewhat wider spreads on our deposits as rates rise.

>> what about the trading environment?

>> trading has been tough. it has gotten tough, generally in the environment, but, as well, the way we have positioned relative to this environment in the second quarter.% but the overall environment, it is not just comments that j.p. morgan is making.% i think if you look at all securities firms, we have all commented on the fact that april was a better month than may was a better month than june so we are walking into an environment just now that is a little bit more difficult. we are walking into the summer months in which you see reduced levels of activity in the markets . august historically an extremely low month. so what we want to do is be cautious on this very short-term outlook because the focus on the street is very much what’s in the next quarter and in that context, we want to convey a certain level of caution.

>> cost savings, you know you update to $3 billion, including the firing of 10,000 workers, is that correct?

>> we have updated our estimates for head count reduction to 12,000. net we are down about 2,000 as of june 30 so incrementally there is quite a bit more to go. we have increased the savings and the pace at which woo achieve those savings and those both are meaningful in an ongoing basis in assessing the company and the earnings of the company so savings are up, almost $1 billion, and the pace of execution, we now talk about the 2.2 billion, which was the older number, the 2.2 as being there by the end of 2005. we talked about that being a number we would achieve in 2007. so the pace is significantly better.

>> one last question, biggest challenges, convincing shareholders this is going to work.j.p. morgan stock is still down from the acquisition of chase back in 2001. a lot of these big mergers don’t work out. you know it well. what is it that you really need to do to provide shareholder value?

>> chase acquisition of j.p. morgan was at a point at which we had bursting the bubble. so we had the situation in which not just j.p. morgan but overall all the securities industry went through a major correction in the following years -- 2001, 2002, 2003. i don’t think there is any evidence to say that the execution of the merger, chase and morgan, was not well done. what we had is a situation in which we acquired a company at the peak of the market in terms of the overall economic cycle. that is not the situation we are noat this point with the merger with bank one.

>> she would not comment on reports that j.p. morgan is in talks to acquire the internet banking arm of britain’s prudential. democrats invade boston next week. voters’ paychecks will be a key topic of conversation there. we’ll look at where they stand in the “chart of the day” coming up.

在线播报
Listen Market briefing --- Lane (slow)
NYSE --- Deb (fast)
Richard Grasso --- Allan (slow)
Dreamworks --- June (slow)
>> starbucks reporting numbers this quarter. we’ll go live to one of their coffee shops to speak with starbucks c.e.o., orrin smith. we’ll look at the numbers from the new york stock exchange -- you can see the weakness as the day went on, closing at the low of the day. traders have concern about that when that happens, especially when the wilshire is down 1.5%. deborah kostroun is at the new york stock exchange where it was a pretty busy day there, busiest day in a month, deb?

>> that is right, busiest day in a month here at the new york stock exchange. stocks fall for a fifth day in six and what led to all that activity, the huge turnaround we saw in today’s session, the volume really at 1.6, almost 1.7 shares. however, most of that volume was down volume, something traders don’t like to see. it looked like a lot of institutional activity was in the market because you saw a lot of brokers really moving around on the trading floor. that’s when you know you have institutions going into the market . also, it was a 190-point turnaround. at the top, we saw the dow jones industrial average at one time up 88 points. by the close, down 102 points. that, a very large move. much of that move came in the last hour of trading. peter henderson of fleet specialists today said what today tells you is maybe the market doesn’t believe that the economy is moving along at the good clip we think it is. also, the s&p 500, closing below its 200-day moving average in today’s session. and all of this big move downward came after dow members actually posted better-than-expected earnings from many of the companies like j.p. morgan, also general motors. united technologies raised their 2004 earnings forecast and although we had some good movement there, you also saw the downward pressure mainly from capital good stocks like 3m and caterpillar. back to you, lane.

>> deborah kostroun at the new york stock exchange. eight states and new york city today sued five of the nation’s largest power companies in an effort to force a 30% reduction in carbon dioxide emissions. after the press conference about the global warming lawsuits, allan dodds frank caught up with new york attorney general eliot% -spitzer to get his reaction to the latest legal maneuver by former new york stock exchange chairman, richard grasso.

>> when richard grasso asked a federal judge yesterday to order the exchange to pay to him more than $50 million, he also claimed he had been defamed by john reed, the exchange’s new chairman. grasso’s filing said that a secret report done for the stock exchange by former prosecutor dan web would exonerate him while making the exchange and reed look bad. so far, the exchange has refused to release the report. i asked new york attorney general eliot spitzer about grasso and the webb report.

>> let me say this, i have read the webb report. it was one of the early documents we examined before we then did our own significant examination. but there is absolutely no tension between the webb report and the allegations we make in our complaint and therefore i think mr. grasso’s characterization is not one that i think is an accurate statement about the webb report.

>> there may be more filings in the case this week, but the next big step will be the federal court decision about whether the case is heard in federal court or state court.

>> any idea when we’ll hear which court it will be in?

>> the judge is still going over it. i expect more filings by ken langone, the former director in charge of the compensation commission. he hasn’t yet responded and might file his own counterclaim against the stock exchange. we’ll wait and see.

>> thank you very much.% the big after-the-bell earnings report from ebay. shares fell as much as 6% in extended trading. the company says profit forecasts for the current quarter and full year will be below analysts’ estimates. the stock after-hours down over $4. in the last quarter ebay doubled. that’s up from 14 cents a share earlier. excluding costs, ebay’s profit came in at 29 cents a share, two cents ahead of estimates. and ebay’s c.e.o. meg whitman about our guest in about an hour and 24 minutes. out with earnings, qualcomm’s profit more than doubling last quarter and topping analysts’ estimates in the current quarter. shares are rising in extended-hours’ trade by 15 cents. net income topped analysts’ estimates. sales rose for a ninth straight quarter. qualcomm benefiting from rising global demands for phones based on the wireless cdma technology. qualcomm said fourth-quarter earnings grew 54 to 57 cents a share, excluding items, above analysts’ estimates. the animation unit of dreamworks is going public with the goal of challenging walt disney. june grasso has more.

>> dreamworks animation is known for capturing the imaginations of children and adults. now the company wants to capture as much as $650 million from investors. the sale would be the biggest entertainment company i.p.o. in nine years. this follows the release in may of dreamworks’ highest grossing film, “shrek 2”. the company had the fourth biggest market share of the top films showing in the united states and canada last weekend. dreamworks animation will separate from its parent, the movie studio started by jeffrey katzenberg and david geffen. managing partner at media tech capital partners says separating from the parent company was the only solution for dreamworks animation.%

>> they have a blockbuster in the animation right now and they’re going to try to capitalize on it. they have a big debt and unhappy shareholders, paul allen, co-founder of microsoft, locked in with a significant investment and the only thing they can do is see if they can get the public on board.

>> dreamworks plans to use the cash to double its film production to compete with pixar animation studios and disney. it ranked number eight in the u.s. market share among hollywood studio, dis disney, number one. but disney may lose its film distribution agreement with pixar and hasn’t had much luck with its last animation films. dreamworks has released eight films grossing close to $800 million in the u.s. the company only made money in two out of the last five years. goldman sachs and j.p. morganchase are managing the sale.

>> shares of imclone sank after the company reported second-quarter profits. the stock ending the day down 19%. imclone makes the colon cancer drug erbitux and reported profits of 29 cents a share, ahead of analysts’ expectations. the company declined to issue a forecast of erbitux sales.

>> it’s very difficult to predict something such as erbitux sales in such a short period after launch. there are only so many data points, just a few months, to be able to project so it’s a difficult thing to do. we have not provided guidance because it is so difficult. we only want to guide if we can guide with accurate information and i think because of that and the difficulty to predict --

>> yesterday, imclone said it would wait until next year to seek u.s. approval for a new use of erbitux in head and neck cancer. j.p. morganchase lost more than $500 million last quarter after setting aside cash to settle lawsuits stemming from corporate scandals. we talk with the bank’s chief financial officer about when it may be able to put that behind them, coming up.

Charles Schwab --- Bob (fast)
The effects higher rates will have on the company
Interview: Ameritrade --- C.E.O. --- Joseph Moglia
>> charles schwab corporation has ousted c.e.o. david pottruck and replaced him with founder charles schwab. bob bowden joins me with details of the story.

>> the switcharoo, thank you, matt nesto. david pottruck became co-c.e.o. in 1998 and sole c.e.o. in -- and failed to lure wealthier clients from merrill lynch. schwab’s revenue fell 39% and net income drind 34%. during the same period, ameritrade’s revenues grew 12% and grew to a profit of $137 million in 2003. investors say schwab is caught in an identity crisis. wane bopp―wayne bopp puts it this way, schwab is caught in the middle between discount pricing and full-service pricing, thrashing about trying to find something that works. pottruck and his company benefited from the bull market in the late 1990’s. by the the end of 1998, schwab’s market value exceeded that of merrill lynch. but as business slowed after the stock market peaked in march of 2000, schwab cut 10,000 positions, a 61% staff reduction reduction. schwab’s stock has lost significant value and the market share is a quarter of merrill lynch’s. one analyst believes this paves the way for schwab to focus on retail investing.

>> i hope they return to their core strength, retail investing and asset accumulation. they are the best company in the united states at bringing on retail assets. i think with the replacement of david pottruck, it―the stay, charles schwab shares were up 6.66%. driven as much as anything by the reporting of ameritrade reporting their numbers.

>> thank you, bob. ameritrade shares were up, 14% today. the company reporting a 25% gain in profit, cost cuts, higher interest revenue and fees helped earnings rise to 62.3 million dollars or 15 cents a share, matching or in line with the average estimate from analysts. ameritrade c.e.o., joseph moglia, talked with us about the effects higher rates with have on his company.

>> we have a reasonable way to go where without it having a negative impact at all in our business. the opposite might be the case. for every 25 basis points or so that the fed funds rate actually gets raised, that’s going to have a positive impact on our bottom line. i think the real question is, if the rates go too high, will more people borrow less money and we certainly haven’t seen that yet.

>> the market has been going through a period of below-average trading volume, obviously reflected in some of your numbers today. what do you think has been the problem with people just sitting on the sidelines for such an extended period of time? >> you and i have talked before about retail being a lagging indicator in terms of what goes on in the markets . as the markets don’t do particularly well, people open up fewer accounts, move to the sidelines and do fewer trades. i think that’s basically what we’ve been seeing, not because the economy is bad, because the economy is in pretty good shape. i think there is real concern coming out of the middle east and concern with regards to the overall presidential election. that creates a cloud of uncertainty in the marketplace and the typical individual investor doesn’t like that and tends to move to the sideline.

>> he also spoke with us about rival charles schwab and what might happen should it look to sell off any of its assets.

>> if they were to unwind assets as being bantered about, what might be attractive, if anything, to ameritrade.

>> we look at potential merger or acquisition opportunities all the time, monica, in terms of the marketplace. this past quarter we just closed the bid wellisition and announced two more. i’m not sure exactly what schwab has for sale, if anything, and when that’s public, it would be something we would look at. but right now we don’t know enough to have a judgment on.

>> that your contract runs out next year. in terms of the management team, you say that the strategy is set for the next two or three years. if you decide to stay, does that mean you’ll have a different role, allowing others to take the lead in some cases?

>> i think the plan is either i’m going to continue as c.e.o. or i’m going to retire. and i think whether i stay as c.e.o. or retire, the strategy at ameritrade is very much in place, the board is committed to it and the management team is committed to the execution of that so whether i’m there or not not, there ameritrade will be in great shape.

>> there it is, the c.e.o. of ameritrade. ford gives us a profit for the year, disappointing some investors. the c.f.o., we had a chat with him earlier and we’ll have that interview for you. plus, tomorrow we hear from rival g.m. increasing sales in china boosted the bottom line?

在线播报
Listen Market briefing --- Matt (slow)
Microsoft --- John Bernum --- Chairman of Burnham Securities (slow)
FED --- June (slow)
NYSE --- Deb (fast)

>> microsoft planning to return some of the $56 billion in cash it has been sitting on, returning that money to investors. shares up over $1, just about 4% in extended haws trade. the software maker says it will buy back as much as $30 billion of its own shares over four years. it’s also set to pay a one-time cash dividend of $3 a share. microsoft will also switch from a yearly dividend of 16 cents a share to a quarterly dividend of eight cents a share, thereby doubling its regular quarterly dividend de facto. microsoft has said that sales growth may be the slowest ever next year, led to renewed calls for returning cash to investors.

>> a surprise that the growth rate will slow. but that doesn’t really mean that they’re not going to continue to be able to generate lots and lots of cash and in fact increase the amount of cash that they generate.
>> to give you an idea of how much cash microsoft has, last year it generated more free cash than intel, exxon-mobil, wal-mart, all combined. on the phone right now, for reaction, is john bernum, chairman of burnham securities in new york, owner of 25,000 shares of microsoft. the market clearly pleased in extended hours with the microsoft moves. your thoughts and insight on this decision?

>> first of all, it’s 125,000 shoirs owned in the fund which i manage. i don’t own it personally.

>> correct.

>> i do own it personally, but not that much. i was pleased with about what microsoft did and i was really expecting it to happen. rick sherwin of goldman sachs has been right on this story since i would say early june, something like that. and we have had microsoft, have added to it substantially for all of our accounts. they have so much cash there at microsoft, they couldn’t really continue to sit on it forever. in a sense it belongs to the shareholders. and they haven’t been doing anything with the cash so now they’re doing something to it and buying $30 billion worth of stock over the next four years, puts a floor under the company.

>> some would ask you, japanese -- japanese, this means microsoft doesn’t know how to invest money and they’re handing it back to investors.

>> $55 billion is an awful lot of money and the financial industry is full of companies that have tried to spend their cash by making acquisitions and so on and so forth and a huge number of those acquisitions have turned out to be ill-advised and i think microsoft is sticking to what they know best, which is their business. and i think their business is very good, this is a huge, mature company. it’s difficult to grow their sales.

>> our thanks to you, jon, appreciate your coming on and joining us with instant reaction, jon burnham. checking on the bond market here today, we saw continued declines as the fed chairman signaled. that the federal reserve is on track to continue to raise rates rates. yield up, 4.44 on the 10-year note. jon burnham alan greenspan, of course, just finishing his testimony to the senate banky committee and june grasso is here with a summation of what was said.

>> thank you, matt. those well known words or now well known, at least, measured pace, once again the heart of what greenspan said. the federal reserve chairman spoke of a growing economy and a slowdown in consumer spending that’s only temporary.

>> inflation also seems to have been boosted by transitory factors such as the currently in energy prices. those higher prices, by eroding households’ disposable income, have accounted for at least some of the observed softness in consumer spending of late, a softness which should prove short lived.

>> other signs of slowdown in june was just a blip, greenspan says job growth is looking stronger this month versus june where a disappointing 112,000 jobs were created. he says there is no evidence of a slowdown in home sales with the economic expansion headed toward growth this year of 4% to 4.75%, greenspan says he can raise rates at a “measured pace.”

>> if economic developments are such that monetary policy neutrality can be restored at a measured pace as the fomc expects, a relatively smooth adjustment of businesses and households to a more typical level of interest rates seems likely.

>> next year, the federal reserve expects a slowdown in g.d.p. growth to a range of 3.5% to 4%. the economy and jobs are top issues in the presidential campaign and greenspan joined other fed officials in predicting that june’s disappointing data would be an aberration. he sees the unemployment rate dropping to 5% to 5.5% by the end of next year.

>> busy afternoon, thank you, june. deb kostroun, of course, as she always is, down at the big board tracking what was moving markets there today. it was the largest gain in a month. deb?

>> corning, that helped lead gains among technology companies. in fact, corning, the biggest gainer on the s&p 500. that after saying second-quarter profit beat analysts’ estimates. on the losing end in the s&p 500, the auto stocks. auto stocks like ford, general motors lower. ford said second-quarter profit almost tripled because of record earnings from vehicle loans and investors saying really, hey, we’d like to see you make more earnings from selling cars. general motors, their earnings released before the opening bell tomorrow. auto parts, interesting, when we’re talking about automakers, 10eco automotive, biggest maker of vehicle shock absorbers, saying their second-quarter profit rose and revenue climbing to a record $1.1 billion. and housing starts fell in june to their lowest level in a year and the bloomberg home building index, tenuous yesterday, falling again today. we did see homebuilders as the yield on the 10-year note actually was easing but over the last couple of days, much concern about the slowdown we could see in housing because of rising interest rates. also, insurance stocks really moving today. convarium holding, a swiss reinsurer, reported an unexpected second-quarter loss and said they may have to ask shareholders for more money to boost capital eroded by u.s. casualty claims and after that statement, moody’s investors services placing the company on review for possible downgrade so insurance stocks on the losing end today. computer services like ceridian, they were suppose to release earnings today. this is the provider of payroll and benefits administration. they postponed the release of second-quarter earnings because they are reviewing costs in human resources businesses.

>> thank you very much. we’ve been talking a lot about charles schwab today, led by the founder and namesake of that company. once again, it is so. the c.e.o. has been asked to leave.

Economy picture is bright
Interview: Brian Westbury --- Chief Economist --- Griffin Public Stephens and Thompson
>> brian westbury, chief economist with griffin kubic stephens and thompson says it is economy picture is bright.

>> the fed is very easy. the tax cuts we put into place last year are still in place, still doing their job of boosting incentives. when those two things are together, we tend to see the economy grow rapidly. already, after weaker data in june, we’re seeing good data in july and it looks as if the economy is ready to go back on a torrid path of growth.

>> rich, what about you? you had some of the lowest estimates in terms of g.d.p. growth on wall street. do you agree with the optimistic outlook or are you more cautious?

>> i am more cautious but i think brian is right in the fact that we have an inordinate amount of stimulus from the fiscal side in the tax cuts as well as an extremely accommodative monetary policy. i suspect that the economy, however, will decelerate a little bit, just a little bit. my forecast, as you mentioned, slower on the totem poles of economists but more analogous of a car moving at 55 miles an hour, which is what my 3.5% economic growth forecast, and maybe brian’s is stronger than that and probably somewhere in the 70 mile, which is fine, but you have to remember, if i’m the low man looking at 55 miles an hour, that’s a good thing so the economy is very far from anything recessionary or anything silly like that.

>> in terms of the slower growth, the 3.5%, what is it that’s causing you to be at 55 rather than at 70? is it, for example, slowing profit growth? concern about the consumer? what causes you specifically to be more cautious?

>> i think we’re hearing from a lot of conference calls we’re listening into, and there was hessitancy around june 30, the last two weeks in the earnings period, software and tech companies saying there was a drop-off right off the cliff as far as new orders and some orders that did not go signed. so we’re suspecting that there was hesitancy with respect to the handover of sovereignty to the iraqi people as well as the unknown magnitude of the fed’s rate cut. we suspect it’s coming back, the economy―that was a temporary blip but i think there’s enough cause or reason for uncertainties in the second half that will cause us to be going on the slower side rather than the path of torrid growth which we have been on.

>> brian, jump in there.

>> i was going to say that i’m right with rich. worries about fed rate hikes, worries about iraq and potential terrorist attacks, a corollary to that and also worries about the election. we have literally in november we could have a completely new path of tax policy, of iraq policy, of terrorist policy and i think that creates uncertainty, as well. but my feeling is that with the fed so easy and tax cuts in place that these will all prove to be temporary blips and hiccups due to uncertainty and we’ll tend to go over those. corporate profits are very strong.%

>> this debate continued on the jobs front with yamarone predicting a slowdown in hiring for the remainder of the year.

>> the economy is creating jobs, they’re very good jobs, high-paying jobs in the service sector. i love anecdotal evidence. anecdotal evidence i gather when i speak in front of groups and people, hey, are you in the service economy? yes. are you employed, do you like your job? yes, are you making money? yes. what i do in the service economy, i’m doing fine. most of the people i do speak with in every aspect are doing very fine and making money so the government statistics could say one thing but the anecdotal evidence, you have to ask your neighbor, open the window. look at all the landscaping and housing stuff going on, that’s services.

>> brian wesbury says there’s nothing fundamentally wrong with the labor market , the service jobs are at management level and higher paying.

>> and the legal case against richard grasso and allan dodds frank has the latest.

>> new york attorney general eliot spitzer has filed a motion seeking to move his case against grasso back to state court. grasso’s lawyers wanted that case moved to federal court in june. spitzer said grasso was paid $190 90 million during his -- $190 million during his eight years at the nyse and wants to recover some of that. spitzer asked the judge to consider the argument that the case should be in federal court is ridiculous because it is in regard to the new york stock exchange.% he said there is no federal law with regard to the new york stock exchange and its award of compensation. he continued -- he points out that most labor disputes involving the new york stock exchange go to state court court.

>> retail sales in the u.s. have plunged to resession-type levels. that’s coming up.

在线播报
Listen Market briefing --- Matt (slow)
NYSE --- Deb (fast)
Ford --- Su (fast)
welcome back to “world financial report.” i am matt nesto. let’s bring you the closing numbers on wall street. top order of business saw the dow down just about .5% in an otherwise little-changed marketplace. 3m shares down over 5%, you could say singlehandedly practically pulling the dow down today. volume on the big board -- the dow was down today but lots% of individual stories behind that benchmark index. deb kostroun has the story.

>> yes, many individual stories. stocks down for a fourth straight day. 3m a major part of the picture, accounting for 3/4 of the loss in the dow jones industrial average and the s&p 500 below its 200-day moving average of 1104. a technical level that traders do look at. coors coming in at a 52-week high today. there is talk of a possible deal going on and here in the after-hours’ session, molsen and adolph coors saying they are in talks regarding a possibly merger subject to approval by the two boards. also, the biggest drop in two years for legg mason, also leading down the amex broker/dealer index. legg mason saying third-quarter earnings rose 48%, much less than analysts estimated. many other brokerages have have been restrained mainly by the declines in stock and bond trading revenue. lexmark, the biggest drop in the s&p 500, saying third-quarter profit as low as 90 cents a share, expected to earn 97 cents. black & decker, the biggest gainer in the s&p 500, their biggest gain ever for that stock, up almost 12%. this is the largest power tool maker saying second-quarter profit was $1.50, more than analysts estimated and helping out stanley works, that stock also higher on on the day in reaction to black & decker.

>> it wouldn’t be averages season without earnings results, starting with corning beating profit estimates on wall street. the world’s largest maker of fiber optic cable posting a second-quarter net income of seven cents a share. backing out one-time items, corning’s profit is 11 cents, two cents better than estimates. corning shares in after hours, up 6.2%. also, u.s. auto insurance giant allstate reported its results saying net income increased to just over $1 billion, or $1.47 a share, up from 84 cents a year ago, well above the estimates of $1.15. the company says profits were helped as insurance losses from natural disasters fell and the company has been using a computer system to target clients with fewer losses to buy more products. u.s. automakers report earnings this week and tomorrow we hear from ford, expected to say gains from its finance unit helped second-quarter profit almost double from a year ago. the question from investors is if ford can sustain that growth. here’s su keenan with a full report.

>> the focus on the sales themselves, matt. lehman brothers expects both ford and g.m. to post positive second-quarter earnings. its analysts look ahead to the likelihood dealers will have more cars than they can sell. automakers have said june sales fell out of concern for rising inventories and slowing growth in china. lehman has cut its ratings on the stock and bonds of both automakers to market weight from overweight. lehman’s chris grimm says while he may be making a call before earnings are out, he sees a greater possibility of production cuts and increasing incentives in the second half of the year and this. helping the bottom line. deutsche bank’s analyst rates the stock a sell.

>> their strategy is risky. they’re giving up a ton of market share but getting much better pricing. on a year-to-date basis, their retail market share is down 80 basis points and overall market share is down 120 basis points. their production clearly has to come down.

>> ford chief executive william clay ford jr. hopes to win back market share with the october launch of a redesigned mustang sports car. the new offerings include two new sedans and new sport utility vehicle. 47-year-old ford who became c.e.o. three years ago, says the mustang project was a good test for him.“if we didn’t get a sense of discipline into our product development system, we were going to die.” david breman says investors are waiting to see if the company with boost profit on more than just trucks. trucks such as the f-150 account for half of ford’s profit. last month ford changed estimates to a range of 45 to 50 cents a share. ford is expected to report second-quarter revenue at $36.5 billion xard to―compared to just over $40 billion a year ago. today ford shares rallied ahead of the report. shares have lost 6% year to date. the full earnings report is out tomorrow morning before the bell.

>> thank you, su. here’s another one worth looking at today, shares of boston scientific. they were down for a second day. in fact, they were down for the 15th day in 20. this following friday’s recall of almost 100,000 stents, the tony mesh tubes that―tiny mesh tubes that doctors implant into clogged arteries. faulty stents are linked to at least three deaths and 43 injuries and that has pulled the shares down to about their yearly low, a seven seven-month low. peaking inside the bloomberg and looking at the boston scientific story starting the the 1992 i.p.o., still up 800% and you can see the rally kicking off. this is the recent low, $6.50 a share here. the stock, over the past four years, this? in january of 2001, the past three years, excuse me. we’ll tighten it up for you and give you a better feel for this almost uninterrupted rise until this all-time high we hit come march or april, excuse me, of this year. just about as i said, $46 per share. worth taking a closer look still, zooming in, a couple of things. i’ll tighten this graph for you, but this is a three-year chart and what’s worth looking at is the relative strength at the bottom. i’ve circled it in. this is the most oversold this stock has been in at least three years and the only time really it has fully breached the oversold indicator. if we look at it, you can see the double decline here in the share price in the near term coming from that all-time high in april. a rebound back, up, and back down again, breaking us back to as i said at the open here to where we were basically when the year began. that’s boston scientific for you in a nutshell. when we return, we’ll hear from two economists on their forecasts for job growth and the economy, richard yamarone of argus research and brian wes brie of griffin cubic and stevens. stevens

A preview of market action --- Paul (slow)
Asia Pacific preview --- Gene (slow)
>> shares of yellow roadway are at an all-time high and the chief executive says a fuel surcharge has allowed the trucker to pass on the effects of rising fuel cost. he also said yellow is ahead of schedule in integrating roadway into the operations and may not be done with acquisitions.

>> the first thing we’ve got to do is digest the acquisition of roadway, but i think it’s fair to say we’re not done. i would think in the future you will see us do more thing.

>> last week yellow raised the second quarter earnings forecast for the second time. its results out next thursday. for a preview of market action in europe, paul george has this report.

>> this coming week is a big one for technology stocks. arm holdings, whose semiconductor designs are used in most cellular phone, gets the ball rolling as it reportsen the second quarter earnings. last week wasn’t a great one for chip stocks as a whole. they were downgraded at merrill lynch and arm holdings and s.t. micro were cut to sell from neutral. later in the week there are results from s.t. micro, infineon, and ericsson. also reporting is the largest dutch chemicals and drugs manufacturer at akzo. they are facing falling sales. it stopped selling the antidepressant. it sees a trading a week after a newspaper report said investors are being urged to oust the chairman, john peace, a powerful national association of pension funds is reported to have complained that peace isn’t independent enough because he is also chief executive of the parent company. in may, they said second half earnings increased 37% as it introduced new lines including pink trench coats. very well received. and it also opened new stores. the operator of spain’s natural gas pipeline kick off the week in which 10 companies report. and they will probably say in the first half profit rose over 9%, boosted by higher demand. and the largest aerospace show will be held this year and is expecting 1,300 companies to attend. for one in particular, it is vital to do well. boeing will show case the first new plane with the 7e7 dreamliner. it is hoping to stair the limelight from rival airbus. finally on monday, the largest distributor of electric equipment rexel will release second quarter sales. it will also report the full-year yults from jarvis.

>> from london to tokyo and here is an asia pac preview.

>> topping the business headlines in the coming week, on tuesday, hong kong releases jobless numbers. the unemployment rate probably held at a two-year low in june as expansion of companies helped create jobs for graduates entering the work force. south korea ya’s jobless number is out the same day. the unemployment rate probably rose in june as domestic demand remained weak. india may say on wednesday exports rose in june as faster economic growth in the u.s. filled demand for local textiles, gem, and jewelry. the malaysian substitute of economic research will hold the 19th national economic briefing. the institute said in april that malaysia’s economy will probably accelerate to 6.7% growth this year held by higher commodity prices and demand for electronics from the u.s. and china. looking at the corporate highlights of the new week, they plan to list the stocks and the new york on july 23. l.g. phillips raised $1 billion in an initial public offering. falling short of the target after cutting the number of shares in the sale. seoul-based l.g. and royal phillips electronics cha own 50% scrapped plans to sell part of their stakes in the company. taiwan’s a.-1 electronics reports second quarter earnings. the world’s third largest makers of flat panel earnings quadrupled. earnings is scheduled to be announced on thursday. singapore’s biggest chip maker, charter conductor manufacturing may report the second straight profit after three years of losses on rising demand related to chips with computer parts and cell phones. and india’s third largest software services company may say friday that first quarter profit rose as they got more orders at customers at wipro. that’s a look ahead in the asian-pacific region. now back to you.

>> all right. by all accounts a busy week coming up. also, from the all stars of baseball to the superstars of the nba. why the ratings for this week’s major league baseball all-star game were at the lowest in half a century. and how the lakers kept kobe bryant from going across town to the l.a. clippers. it’s all in this week’s edition of money and sport, so stay with us.

在线播报
Listen Market briefing --- Matt (slow)
Nasdaq --- Julie (slow)
Martha Stewart --- Allan (slow)
>> welcome back to “world financial report.” i’m matt nesto. let’s give you the day. there was on wall street three red air rose. dow, s&p, and nasdaq closing down on friday and for the week as well. checking on bonds, they were up and sharply if 10-year note having the biggest one-day gain in four months. the yield at 4.35%. a three-month low. shorter end of the curves similar moves. bonds higher, yields, of course, lower. and currency trading affect bid the same thing which is slower than expected inflation. we saw the dollar weaken here today. the dollar index at the lowest since late february. the euro, the yen, and the pound all gaining against the dollar. well, the f.d.a. is now saying it doesn’t expect a further recall of stents at boston scientific. that’s right. the food and drug administration says it believes the company has discovered all of the bad stents after an expanded voluntary recall of its drug-coated taxis devices because of possible defects in the delivery system. it also began a recall of its express two coronary stents. the recall will involve approximately 85,000 express two stents. the recall will effect financial results for the second quarter, about 200 stents were recalled earlier this month. the shares did not take the news well, down over 7.5%. rival johnson & johnson shares, though, got a lift up about 2.6% today. the nasdaq ended the week lower led by semiconductor stocks. julie hyman wraps it up from the market site in times square.

>> the nasdaq finished the day about 30 points lower. that took it to a more than 3% drop for the week. this is the third straight weekly decline for the index. and once again being led lower by the semiconductors. the philadelphia semiconductor index, in fact, dropped more than 8% this week and it’s been one of the worst performers for the week, the month, the year and really have been beat up so far this year and, again, thus far this week. today there were a couple of elements that pushed down the semiconductors. again, one of them is that motorola cut the price of the initial public offering of the semiconductor unit which sort of demonstrated the lack of demand for these sort of shares. that helped push them down. on the other hand, we had one of the companies coming out with results that did not match expectations. that was p.m.c. sierra. it did match expectations in terms of the second quarter net income after it posted income after a loss a year earlier. it is the third quarter sales forecast that came up short of what analysts had been looking for. on that, we saw a couple of the competitors fall as well. applied micro circuits and vitess semiconductor had big declines today. we had one positive semiconductor-related company and that’s rambus. both of these better than expected if company’s sales forecast for this quarter coming in ahead of what analysts were looking for. on the downside, however, not in semiconductors, netflix having a big drop today. almost 30% after the company’s second quarter profit fell 13%, more than analysts had estimated. this is because of higher marketing costs as well as subscription fulfillment costs. this disappointment even though sales were up 90%. and that’s a look at how we were trading today. back over to you.

>> in other news, j.p. morgan chase reports second quarter earnings next week. it’s the first results since the company acquired bank one earlier this month. a $58 billion deal. and investors will get a chance to hear from the company’s new president, jamie diamond. carol masser takes a look at diamond’s rise to the top and how the new job gives him a second chance at winning wall street glory.

>> we will be a winner this business --

>> jamie diamond is out to win, determined to make the new j.p. morgan chase number one. six years after being pushed out at citigroup by the company’s chairman and diamond’s former mentor, diamond is back in new york ready to challenge his former employer for banking supremacy.

>> we are at the point now where he has a chance to possibly even go to great irheights than sandy wile.

>> jamie and i would --

>> this time they are teaming up with william harrison to run nation’s second largest bank with $1.1 trillion in asset behind only citigroup. diamond will be c.e.o. when 60-year-old harrison steps down in 2006.

>> i really believe that 90% of the reason for that merger was to get jamie diamond to come and run the company. they probably couldn’t have gotten jamie to come any other way.

>> if you want to hear the rest of carol’s report, it will be on bloomberg tv tomorrow. also, you can pick up the august issue of bloomberg markets magazine. there it is. jamie dimon’s second chance. that is on newsstands now. archipelago says the i.p.o. price could be as low as $13.25 or as high as $15.25. that is wider than an initial filing that saw the i.p.o. price at $15 a share. it’s offering a 4.5 million shares and it sees proceeds of about 55 million. i will point out that bloomberg trade book a sister company of bloomberg news, competes with archipelago in matching and routing orders for stock trades. boeing will pay as much as $72.5 million to settle a sexual discrimination lawsuit brought by female employees. the work says they were denied pay raises and promotions. the u.s. district judge today gave preliminary approval to the settlement which had been announced in may before the cast went to trial. boeing will change its pay practices and pay the class members a minimum of $40.6 million with a maximum of $72.5 million. the final amount depends on how many women actually file claims. shares of yellow roadway reached an all-time high today. that and more coming up next.

A preview of what's expected --- Daniel (slow)
>> oil prices rose to a six-week high on concerns that opec is pumping close to full capacity in order to meet the biggest surge in global demand. that leaves little slack to cover any possible disruption in supply. we check the price of oil today up just about 1.2%. $41.25 for barrel the futures in new york. another deal in the banking industry to talk about. pennsylvania’s biggest bank, p.n.c. financial, is buying riggs national. the price tag is $780. the stock and cash works out the $24.25 a share. it also represents about a 7% premium to the closing price of riggs on thursday before the deal was announced. the washington, d.c. bank has been under investigation for violating money laundering rules. riggs has been labeled a troubled bank by regular regular laytors and p.n.c.’s c.e.o. had this to say about the deal.

>> by the time we close on this transaction, which will be sometime at the end of the first quarter of next year, we believe the regulatory issues will be behind them. if there are surprises that take place duringing that time that are significant, we clearly have the right to change the transaction and not go through with it contractually. we do have protections in case there are any meaningful issues that arise.

>> what do you get for your money? p.n.c. gets $6 billion in assets and 50 branches in the washington, d.c. metropolitan area. well, next week is going to bring big earnings in. we’ll hear from ford, sun microsystem, j.p. morgan. in fact, over 170 companies in the s&p 500 are on tap to report the results. for a preview of what’s expected, we bring in bloomberg’s daniel sesla. we had over 100 in the last couple of days and 170 next week as well.

>> so far even though earnings have been pretty good, we’re looking at earnings for the companies that report of 25% with more companies than usual beating expectations. the market has really failed to respond. the s&p down for a fifth week in a row. and really it seems like investors are just focusing on disappointments and certainly been a lot of high-profile one, notably intel one of the bigger decliner this is week after it cut the 2004 profit margin forecast. also in the semiconductor area you had kla-tencor and p.m.c. sierra with disappointing forecasts. that really has drummed up concern that started with the software companies preannouncing saying sales fell short of estimates and companies like veritas and peoplesoft and it’s drummed up concern that tech spending may not be as strong as some investors anticipated.

>> what about on the financial front? we had a lot of big financial numbers coming out and more next week, j.p. morgan. what are we getting for a feel in term of financials?

>> merrill lynch, for example, fell short of the profit estimates. and they have been hurt by the slow trading that really hurt revenue. june was the slowest month so far this year in terms of volume ton new york stock exchange. you also had stage street fell 9% the day they came out and they said second half revenue may be lower because of the prospect of rising interest rates. next week hearing from j.p. morgan, a.i.g., and washington mutual who has already given us disappointing news in terms of the mortgage business and how higher rates are factoring into thing.

>> we were talking earlier because typically earnings season sees the majority of companies beating expectations, but i think the belief that we were going to see that happen again this quarter might have been a little less than usual. and yet the numbers are still a majority of them coming in better than the so-called street average.

>> yeah, there is still a ways to go in earnings season. right now with the 25% that have reported, analysts are expecting only 20% growth. really we have had so many quarters of 20% plus earnings growth that investors are used to it. and they’re looking ahead so the third and fourth quarter and even into 2005 and seeing the earnings rate start to slow. and a lot of investors are saying with stocks rising so much in 2003, that it set us up this year for disappointments because expectations for earnings just got too out of hand. awe sure. of course, it’s forecasting season which brings me to third and fourth quarter forecasts. we’re coming down from the 20, 25, to 20, and into the teen, i think, for the third, fourth quarter, full year, right?

>> about 15% in the third and fourth quarter. and about 18% for the whole year. but what’s important is that, yes, it is growth, but what investors are emphasizing and concerned about is that deceleration. you want to buy stocks going into an accelerating sales and profit stream. and that’s why a lot of investors have been moving from technology stocks to companies like energy, energy play, and also consumer stape stocks which have steady growth because they’re going to have a 10% growth throughout the year rather than very fluctuating growth for technology stock.

>> it is interesting because almost―i had the opposite performance in terms of the same groups with i.t. among the worst and energy the best. not among the best, but the best. all right. good. thanks. a lot of numbers to handle and wrangle today. danielle sessa. nobody does it better, folks. share of dell rose after the company boosted the forecast. we will take a look at the world’s biggest personal computer maker up next.

在线播报
Listen Market briefing --- Matt (slow)
NYSE --- Deb (fast)
Martha Stewart --- Allan (slow)
>> welcome to world trade center .World Financial Report. i’m matt nesto. as we said here, the markets a week here to close out another friday. three, four, and five consecutive weekly declines. for the nasdaq, the dow, and the s&p. there’s today’s damage. a quarter of a percent for the dow. just about half a percent decline for the s&p 500 and the nasdaq the worst of the three down 1.5%. and if we check on the volume for the big board t listed stocks, one just shy of 1.5 billion there. over at the nasdaq today, we see 1.7 billion shares trading hands. deborah kostroun was tracking the action, a a busy day for the new york stock exchange, not so much by volume but by news.

>> we have otoa lot of earnings tomorrow, but next week as well. we started off this week with a lot of concern and talk about spucks and that is how we closed out the week. technology certainly taking a hit as we started out the week. merrill advising selling chip stocks and a lot of concern as we got into tuesday and concerned about sales and profs slowing down. then disappointing results from intel and retail sells the weak yens since 2003. surging oil prices coming into play. but the semiconductor stocks generally lower. a lot of concern about higher oil prices coming into play as oil to close at $41.30 and that lead energy stocks to best performers today for also for the week. integrated oil and also the oil service stocks the best performers. in addition to that t high oil prices did raise concern about retail. remember this week we heard about retail sales since the worst level of 2003 in february, but that raised concern to be spending more at the gas pump and also into play in the stegs. the c.p.i. sensitive stock put in the best performance today. utility stocks and bloomberg home building index were some of the sbest performers outside of energy.

>> our other top story today as we have repeated numerous time, the woman will built a suburban catering business into a multimillion clar media empire is going to jail. here, of course, is her stockbroker. and allan dodds frank has been down at the district courthouse and joins us with the latest.

>> matter and her former merrill lynch stock brocker, each gets five months in a minimum security prison camp and five months of home detention when they must wear electronic mon the organize bracelet. monitoring bracelets. that was the minimum sentence miriam cedarbaum caulked she could go to pit she read lu it in an martha stewart before leer cleel troubles began. let’s hear her.

>> today is a shalefuls shameful for me and my family and my beloved company and all the employees and partners. what was a small personal matter became over the last two years an almost fatal circus event of unprecedented proportions.

>> that’s almost the same language she used in court addressing judge cedarbaum. you may have noticed while she apoll jidse and talked about sadness, she did not express any remorse. theether and not reason they and some prosecutors think chance of winning on appeal are not so hot.

>> in fact, that two individuals connected with the case apparently lied and this somehow corrupts the process and reverse on that basis while sending a strong message that that didn’t happen. she does have legitimate issues for appeal.

>> peter bacanovic finally separated himself from martha stewart. the judge granting a request to sentence stewart this morning and bacanovic this afternoon. he aspoljiesed for pain he caused his clients and family, but did not feel like talking to the press at all. his lawyer said bacanovic’s life is destroyed. unlike martha stewart, he has no bank account no, career no, business the fall back on no, celebrity to fall back on. the only thing he has is loss of privacy which seems to be forever. we did talk briefly to the spokesman.

>> it’s a really tough day. any time you have to sit in court and watch their son be sentenced to jail, it’s about as tough as it gets.

>> peter bacanovic’s mother did cry in court and bacanovic kissed everyone in the front row that was a supporter or family member of his. martha stewart allowed herself a small smile and em embraced daughter aleg sis because shezzshe did not get more than the minimum sentence. matt?

>> all right, allan. interesting saga and an interesting finish no, questionn’t that. well, one of the most interesting things today was a reaction in the stock market to shares of martha stewart’s name sake company martha stewart living omni media surging after the sentencing. let’s take a look at how it looked intraday f you will. put together a chart here. a one-day chart. what you are seeing here is the news crossing the five-month sentence. and some would say, geez, that is a reaction and there might have been relief it could have been a harsher rally. other punddits would point out that it was short covering or people that had previously bet in the marketplace that the stock was going to go down and owed shares and had to buy share. part of the 40% rally a that did that and that we saw there was due to so-called short covering. call what it you will. a phenomenal listen huge day in terms of volume, 17-plus sml shares trading hands and also for martha stewart herself. her own personal fortunes rising to over $90 million today with the $3 odd increase in the share of the company she founded. so that is a quick look at martha stewart m.s.o., omni media, story. well, other big economic data out today showed inflation data which suggested that the fed could keep raising interest rates gradually. the consumer price index for june rose .3%. that’s about half the rise of the previous month. the core index, that’s when you back out food and energy costs, that was up at the slowest pace for a year. just .1% there. as prices fell, consumer sentiment rose this month. the university of michigan sentiment index rose to an even 9096, the highest level in six months to 96. the biggest one-day move for the 10-year treasury note that we have seen in four months. the yield down at 4.35. on to the five, 3.54. similar strength there. on the shortest end of them all, you can see not quite the big move there, but clearly the bonds positive today. the treasury department also pointed out today that compounding weakness in the dollar was a report showing a small increase in foreign holdings of u.s. assets over the past eight months. the treasury department sate international investors purchased a net of $56.4 billion of treasuries and stocks and other securities for the month of may down from $76 billion in april and marks the forty straight monthly decline. look at the dollar here today. the euro and the pound up notably. the euro at a four month high and the pond and dollar index inversely approaching four-month highs and four-month low. we’re going to take a look at how the earnings numbers are stacking up so far this earnings season. we’re going to hit the highlights for next week as well coming up next.

Currency
Interview: BROWN BROTHERS HARRIMAN ---RHAME, LARA--- Currency Strategist
>> got some headlines for you. this is coming off the teleconference with the c.f.o. from apple computer and the c.f.o. saying that the delays in deliffing their i-mac p.c.’s are in part due to manufacturing problems at i.b.m. they say they’re extremely unhappy about it but the c.f.o. also saying that they―the i.b.m. rather is putting enormous resources, quote, to resolve the delay. so i.b.m.’s manufacturing problems affected. the i-mac and i.b.m. saying they are putting enormous resources in to resolve that delay. that said sales at the nation’s stores fell more than expected in june down 1.1%, the biggest drop since february of 2003. back out cars and model parts sales were down .2%. compare that to a gain of .9%, a revised gain of .9% last month. higher oil prices contributed to the drop in spending in auto dealers and department stores and june’s retail sales could underscale forecasts for slower consumer spending in the second quarter. still, economists expect third quarter spending growth to rise to 3.5% as hiring and incomes are expected to rise. that weaker than expected sales data could mean that the fed is in no hurry now to raise rates unless inflation data comes in higher than expected. talk about the economy, rates in the dollar. we bring in laura rhames a currency strategist, i believe you are a senior economist is that correct?

>> yes.

>> an interesting title. we have a lot of alamo gatien amalgomation of data today. i was looking at the notes here and you said the market took the news in stride and you said the data should not be cause for much concern which really says a lot about the reaction or absence of reaction in the market today.

>> it’s true. we didn’t―this morning right after the numbers came out we didn’t have a substantial reaction. i think the sales have been so strong that a lot of―i think there is still a lot of thought that this can’t continue at the really frothy pace it’s been going at for so long. what people are focusing more on is really now the inflation data.

>> you had pointed out also that furniture and appliance sales were strong and the caveat or the reason behind it is the housing market continues to fuel consumption. that begs the question, the housing market , can that last?

>> you know, this is the important thing we have to remember. so far for the last several years now as consumers have really faced a very difficult labor market and falling wages they have relied on the house for that push to help them continue that consumption. now that is going to shift. housing will most likely if all theer in the second half of the year and probably not offer the same returns on wealth investment that we have previously. we are going to see now as the labor market improves wages taking over some of that burden. consumer confidence is improving. i don’t see any reason why the consumer is going to shut their purse closed. i think they will however spend at a less rapid pace than the first half of the year.

>> we look at the dollar year to date versus its 16 major rivals and it is up against all but six of them. five of them. excuse me. do you expect that little year-to-date trend to reverse itself?

>> you know, i do. we’ve already seen that starting. i think over the last six to eight weeks, as the fed expectations of very aggressive rate hikes have unwound somewhat we’ve seen the dollar coming off. and i think versus the euro that’s going to continue throughout the end of the year.

>> another chart, this one on this screen, and this is just the euro, the yen, the euro and pound. yen is in white, euro is orange. pound is in yellow. those are percentage moves year to date, the yellow on top of course the pound up about 4% year to date. the yen is up 2% and you can see the euro there down about 1.3%. you, though, are forecasting that the euro will go back to its all-time high by the end of the year and the yen is going to drop or gain rather about another 4% back to its four-year high.

>> yeah. pretty close. i think what we really have to look at when it comes to the yen is the nikkei and i think for example overnight we had a big example of how even positive news in financial markets , the nikkei fell and the yen came under pressure. but i think going forward that the economy there in japan is really in a self-sustaining recovery now, something we haven’t seen out of japan in 10 years and that is going to foster continued nikkei gains and a stronger yen as the year continues. i do think 105 is my year end yen forecast. 128 euro/dollar. we’re closing in on that now. we’ve been in a tight range with the euro but we’re now at 124 closer to the top of that range and i think it will be a dollar bearish --

>> have you changed those forecasts recently at all?

>> we have certainly downgraded our euro positive forecast. we had the euro going even more beyond its all-time record and continuing but i think as u.s. growth rebounded much more in the first quarter than we had expected and there’s been less followthrough the euro has been downgraded somewhat.

>> what is the fed going to do in august?

>> 25 in august but they’ll take at least one meeting off by the end of the year.

>> well done. excellent wrap. laura rhames, senior 4x economist. goldman sachs, cars, clothes, computers, all could become more expensive. we’ll take a look in our chart of the day.

在线播报
Listen Market briefing --- Matt (slow)
Intel --- Bob (fast)
NYSE --- Deb (fast)
>> welcome to “world financial report.” within the past hour we’ve had earnings reports from two tech companies, apple computer and advanced micro devices and both exceeded revenue estimates made by wall street analysts. bob bowdon joins me now with the story.

>> unlike intel which recovered yesterday, intel, which missed -- excuse me―let’s pull the microphone here. here we are, folks. is this going to work? here we go. all right. we’ll try this, matt.

>> please.

>> try it again. testing. unlike intel which missed analysts’ revenue targets the way i missed putting on the microphone apple and a.m.d. exceeded targets. apple reported last quarter’s fiscal third quarter they call it in apple the operating earnings of 17 cents a share. as we have said that is more than triple the figure from last year which was five cents a share. analysts were only looking for 15 cents a share. that last line means apple beat by two cents. apple’s revenue at $2.01 billion was 30% higher than the same period a year ago. it also exceeded the $1.95 billion analysts’ figure. for the current quarter, here we are into the future, apple predicting fiscal fourth quarter profit in a range between 17 and 18 cents a share. that means it could do slightly better than the 17 cents analysts are looking for. apple broke apart its revenue growth by units calling the 19% growth in mcintosh revenue healthy and the press release called the 162% growth in its music business incredible. that’s mostly ipod but also the i-tunes downloads. the c.e.o. teased investors by writing this. we’ve got a strong product portfolio with some amazing new additions coming later this year. let’s check the investors’ reaction to apple’s news by looking at the extended hours trading of apple shares, right now up 74 cents at $30.32. another tech stock with earnings out less than an hour ago advanced micro devices, the chief processor alternative to those made by intel. a.m.d. reported nine cents a share for last quarter compared to a loss of 40 cents a share in the same period a year ago. what a difference a year makes. the nine-cent figure exactly met the consensus average analyst estimate as you see on your screen. moving to revenue, a.m.d. sold more than expected in the second quarter. as we’ve said its revenue nearly doubling to $1.26 billion from a year ago. that compares to the analysts’ estimate of $1.24 billion. the a.m.d. press release characterized the third quarter as follows. in the third quarter of 2004 a.m.d. expects sales to increase―this is the current quarter―in each of its two major businesses and total sales to increase moderately. they did not quantify what they might have meant by moderately and checking shares, down 16 cents right now trading at $13.58 in extended hours. there will be an a.m.d. conference call at 5:30 p.m. eastern daylight time about 27 minutes from now available on the bloomberg terminal by typing live go or also the via the a.m.d. website. back to you.

>> we always like to play with the bloomberg on this program and one of the things we’ll look at right now are the shares of apple computer. this is an interesting chart. the first is a long-term chart. we’re going back 20 years, folks, to 1984. what you’re looking at is obviously a volatile ride. a big runup in the late 1990’s but then we’re referring to this boxed in area in red. let me zoom it in a little bit for you as the $9 billion day. imagine this, folks. the stock lost half its market value in a single day. i had to go back and look up what the heck happened. what happened is their fourth quarter, they came out and said their fourth quarter profit was not going to meet expectations. so we have seen runups in apple shares in the past and rundowns but that peek if you go back to the same chart still hangs heavily over this stock. you can see that little green circle now. this is the 2 1/2-year high that we recently had but it still has a long way to go to get back up to those levels. the stock over the last year or two, let’s say from the trough of march of 2003 is up about 130% over that period of time. now, if i can lift this part up on the top, this is a relative strength. this white line is going to indicate over―the red line is going to be indicating oversold. guess what? in the two-year period of time the stock never hit the oversold line. you see one, two, three, four, five―a dozen times you have hit the overbought line with this runup in the stock. one last thing. this is an index that not everybody takes a look at but this is the box maker index, kind of a cute little name but the b.m.x. is the ticker on the philadelphia exchange and it’s the actual p.c. making companies. if you take a look at these p.e. rashe ose we talk about apple up on the top with the 48 times this year and 35 times next year. one thing you need to point out when you compare that to the market leader of dell, is sales growth. because that 35 multiple times the 2005 earnings is coming with earnings that are forecast to grow 35% whereas dell’s 2005 profit growth is only about 20%, so just keep that in mind before you say, wow, gee, apple is completely priced way out of the universe. that is the end of our little apple dissertation for now. that said, we’ll take you to the broader picture here today. that is going to be a look at how the markets did. as we said, the dow, the s&p and the nasdaq all on the slide today. particularly the tech-heavy nasdaq which was hauled lower by intel, seeing its busiest day in four years. more than 10% of the total trading volume on the nasdaq coming from intel alone. you see the nyse volume respectable in the near term at least at 1.4 but look at that, over two billion. we haven’t done that since the end of april. so 2 1/2 months ago. but again, as i said, some almost 300 million of that coming from a single stock. onto bonds we go. they were little changed, hovering at about a two-month high, the yields of course going to be pushing up and you see 4.48% there and we go to the shorter end and little changed again but 3.67% and 2.59%. so busy day. intel’s earnings, retail sales really having an impact on the session. deb kostroun was there and has it all put into perspective for us presumably. take it away.

>> certainly, matt. of course tomorrow we have the wholesale inventories report, the p.p.i. report, friday the c.p.i. report. a lot of traders are focusing in on these reports because it will give us an idea about inflation and potentially what the fed may be doing with interest rates because inflation seems to be one of those areas. things have stable ayesd in certainly helping out the bond market but at least in today’s session retail sales falling in june by the most since february of 2003 and the culprit higher gas prices limiting some of the sales. of course we’ve been hearing that from wal-mart and the like. also we did see, talking about gasoline and crude oil, we saw a rise in crude oil right near $41 a barrel at the close of trading and that coincided with a drop in stock prices something we’ve been seeing as of late. crude oil and the stock market moving in different directions. but take a look at how retail fared, retail sales falling by the most since february, 2003. you can kind of see those were generally lower. dillard’s however hitting a 52-week high and leonard’s and -- linens and things saying their second quarter earnings would be below the forecast because not as many shoppers are coming into their stores and so that really plays into what we heard from the retail sales. also, remember that auto sales, the biggest drag, we had heard that from g.m. and ford a couple weeks ago and those auto stocks also lower. however, harley davidson, i should mention that stock hitting a record high on their earnings. oil services moving up along with the amex oil index coming in at a record high in today’s session. also media stock under pressure “new york times” after releasing their earnings saying that advertising for the rest of the year probably going to be under pressure. back to you in the studio.

>> deb, thanks very much. appreciate it. well, we have been talking a lot about oil today and what we did see is futures in new york trading hitting a six-week high after the government reported the biggest shrinkage if you will in oil supplies that we’ve seen in three months and this amid surging demand. the u.s. oil inventories fell according to the department of energy 2.1 million barrels last week. as refineries operated at close to maximum capacity we also got data out from the american petroleum institute, a.p.i., which saw five million barrel decrease. 2/3 of the decline though occurred on the west coast. well, weaker economic data may mean a slower cycle of rate increases and that may weigh on the dollar. we’ll talk currencies and economics, next.

Earnings news --- Su (fast)
>> more earnings out after the close of trading today. yum! brands report its profit rose 45% in the second quarter to $178 million. earnings, excludingly,000 items items―excluding items, reported net income per share of 55 cents a share and of course, yum! brands is the operator of taco bell and pizza hut and kentucky fried chicken. the 55-cent figure was three cents ahead of what analysts expected. to the sales, sales rose 7% to 2.1 billion dollars, also ahead of estimates. shares rose .8% today ahead of the report and yum brand shares have gained eight% -- 8% so far this year. merrill lynch shares fell more than 3%. it reported revenue from stock and bond trading plunged 44% last quarter. raymond james also says a drop in trading commissions hurt its profit. su keenan is going to sum it all up.

>> slow is the word, matt. by all accounts, it has been a slow summer for trading volume on the new york mercantile exchange―new york stock exchange, and on the nasdaq, it has been at least 10 months since we’ve seen this sluggish activity. merrill lynch is the first wall street firm to show june’s slow trading is hurting profits, limiting its net income increase to less than 1%. it’s the first time in at least six quarters that merrill’s profit fell short of forecast. while net income rose 10% to $1.06 a share, that’s three cents below analysts’ estimates. merrill lynch is a passive minority investor in bloomberg lp, the parent of bloomberg news. we heard a similar story from raymond james. it says fiscal third-quarter profit rose to $29.6 million or 40 cents a share, still eight cents below the average estimate of analysts surveyed by thomson financial. raymond james stock fell more than 7% on the news before recovering just under 1% of that loss. chief executive thomas james says the impact from lower trading commissions is clear.

>> in the quarter we were off 8% in commission activity, which amounts to a fairly substantial revenue loss, most of which would fall down to pretax profits. so what i would tell you is that if the market continues as it has in the last half of the quarter and the next quarter, ited not be unusual for our profits to be roughly in the same area.

>> on the reasons for the slowdown, jack conlon with variant research gives three, the economy, the election and oil, as keeping investors on the sidelines.

>> obviously, volumes have declined sharply. people have very low conviction and i think you can expect to see lower volumes in august. so i think kind of a very quiet environment with a slightly downward bias.

>> conlon says greater clarity on the economy will help bring investors back to the market . james raphalian with schwab soundview says as many of his clients are waiting on the sidelines, waiting for signs of earnings strength.

>> interesting stuff. so i’ve taken an opportunity here to look at the stock of merrill lynch, as well as how it fares with the brokerage group here today. if i can do this, what i’d like to do, since su mentioned volume and the last sound bite referenced volume, i’ve put together a full-screen graph showing the chart. what we were looking at, minus 11%. new york stock exchange volume from may to june was 11% lighter. merrill, the last of the big brokerage to report suffered through the declines in volume, working out to 160 million shares a day lighter in the month of june for the nyse and two 70 -- 270 million aggregate for the combined, less shares traded. looking at the trough to date, march of 2003, looking at merrill lynch shares, they had a heck of a runup from march, peaking out in march of 2004. so a 12-month run and it’s been nothing but negative since, down 22%. the superlative that jumps to mind, illustrated by the yellow dotted arrow is the fact that the shares you now at a 1-year low. they’ve given back 12 months’ hard work in the span of four months declining. looking at the declines today and also one superlative will jump out, the surprise super lative, and merrill lynch down 3.2 and of the big six in the broker/dealer index, merrill the only not to meet expectations. the three-month losers, there are some big ones in the group. ameritrade down, schwab, jeffries. looking at the p.e. ratios, the most expensive stock you could buy could would be schwab followed by jeffries and then bear stearns, lehman and merrill, all trading at well below market averages. bear stearns says the market is in denial. it may be quiet now but that could change and that’s the “chart of the day.”

在线播报
Listen Market briefing --- Matt (slow)
Intel --- Bob (fast)
NYSE --- Deb (fast)
welcome to “world financial report.” i’m matt nesto. it has just crossed the wires here seconds ago that the co-head of csfb, brian fin, has resigned. we’re citing people familiar with the circumstances. brian brian finn,, a member of the executive board, the second senior-level executive to leave in as many days from the investment banking arm of switzerland’s second largest lender. brian finn, the name in the news at this hour. the other name in the news, of course, intel coming out with long-awaited second-quarter earnings results. investors focused on the glass half empty as shares are trading lower in extended hours. bob bowden has been poring through the numbers and has a report.

>> i want to begin in an unconventional way by showing you the reaction after hours to intel’s earnings report. look at the reaction and i have an intraday chart, closing yesterday at $26.24. closing today at $26.14, then the news announced and shares initially went higher on the news, then investors looked at it more closely and have moved lower but even since that moving lower, they have periodically gone up higher only to fall lower again, trading now around the $25-a-share level. let’s get to the news that created a schizophrenic reaction. intel reporting operating earnings of 27 cents a share, almost doubling in the sprm interim, up 93% from the same quarter a year ago. moving on to sales, this is the first bit of bad news, sales at $8.05 billion, an 18% imprompt from last year but the sales missing the analysts’ estimates. gross margins only coming in at 59.4% compared to the company’s own forecast of 60% to 61% for last quarter. on the issue of the core microprocessor business, weakness expressed in this regard, fewer units sold for architecture microprocessors and lower selling prices, slightly lower than the first quarter but also more importantly, perhaps, fewer units. that data related to last quarter and as usual, investors concerned about the future, leading us to the third quarter forecast. the company projecting third-quarter sales in a range of $8.6 to $9.2 billion, a midpoint of $8.9 billion and that midpoint you see exceeds the analysts’ estimates for this quarter’s revenue, analysts guessing $8.76 billion. if you think the sales forecast means the company will be more profitable overall in 2004, not so fast? intel says gross margins overall in 2004 will be 60% plus or minus two points. previously, the company predicted 62% plus or minus a few points. so the midpoint of the full-year gross margin estimate is two% lower than they previously said. checking right now, intel shares in extended hours, intel closing the regular session today at $26.14, now trading at $25.03. when intel talks, investors in other stocks often react. checking reaction on the part of other large cap semiconductor stocks, texas instruments shares down 42 cents in the extended hours alone. national semi not reacting but look at the advanced micro devices, a leading competitor to the processor business for intel and those shares down 50 cents. checking semiconductor equipment stocks, amat down 24 cents, kla-tencor down 57 57 cents, now 63. novellus systems down 35 cents and checking p.c.-related stocks reaction to intel news, dell down 32 cents, just in the extended hours. dell now bounced back up to unchanged but microsoft down 22 cents. coming up, i’ll interview intel’s chief financial officer, andy bryant, live here on bloomberg bloomberg television at 6 5:00 p.m. -- 655 p.m., eastern time.

>> and nasdaq 100 futures down 18% right now so clearly, as of this minute, the nasdaq showering up for a tough day tomorrow. shares of juniper networks have done their part to soften that intel decline. they’re up 9% in the extended hours as you see here. the stock adding $2, close to $22 a share -- $24 a share. it closed the regular session at $22 a share ahead of the results. if you back out special items, juniper earned twice as much as expected. on a net basis, there was a loss of two cents a share and revenue coming in better than forecast. the company competes with cisco in selling routing equipment to telephone companies. the dow and s&p finishing up today, barely. and the nasdaq pretty much withering throughout the day. not big moves as you see down the line. choppy trading day with the major averages range-bound. deb kostroun was there at the big board to give us the dynamics within an otherwise lackluster day.

>> well, matt, we did see below average volume for a seventh day in a row. things slowing down, not many economic reports coming out. on thursday, we have the p.p.i., on friday, the c.p.i. so many traders i’ve been talking to like peter henderson of fleet specialists talking about why the c.p.i. will be so important for the stock market . he said you have to look at bonds, bonds doing quite well especially with the yield on the 10-year note at 4.47%. he says bonds are telling us that inflation is not out of control right now, and that’s why rates aren’t going to be rising quickly, as the fed has been saying and that’s why friday’s government report on c.p.i. will give us insight into whether or not inflation is a concern. also, the low volume we mentioned not just the market internals because it’s also relevant when we heard from broker/dealers like merrill lynch today. they reported lower-than-expected profits, partly due to lower commissions. raymond james said the same thing. merrill lynch, not closing on a 52-week low but hit it at $49.60. it closed at $49.80. jeffreys and company, their second-quarter earnings came in beating expectations. that stock higher and raymond james, echoing merrill lynch’s statement, that commission sales not performing well. retail sales, we’ll be looking at that closely. some of the retail stocks hit 52-week highs, including dillard’s and j.c. penney.

>> we talked about oil. new york crude oil futures fell for a third day, not a big drop today, but this is speculation that record production of diesel and heating oil in the u.s. could lead to lower demand later in the year. there’s a chart. not a big drop in the trade here today but yesterday it was a different story, of course, pulling back from the five-week high. the price was up but ended up finishing down on the day and all of this ahead of tomorrow’s d.o.e., department of energy, weekly petroleum supply report expected to show a slight decline of less than 1%. so we’re talking―let’s look at the oil supply data if we can. i put together a couple of charts for you, one of my favorites, the department of energy and american petroleum institute weekly supply data. what’s important here, this is a five years’ worth of these, is the fact of how much they’ve come back. up about, we’re at 305 million barrels in the stockpiles from a low of 270 million. that is hovering right around a two-year high in terms of oil supplies. merrill lynch shares fell after second-quarter performance disappointed analysts. we’ll look at the impact of sluggish trading volume in june for the world’s largest brokerage firm.

Money and sports --- Mike (slow)
>> new york giants’ fans have been going to the meadowlands in new jersey for the last 28 years but could soon see their beloved team in a new home. the team’s c.e.o. announced the franchise will consider building a new football stadium instead of renovating the current one. for more, we turn to this week’s “money and sports” segment and are joined by mike buteau out of atlanta. mike, the giants, do they need a new stadium? they share it with the jets, do they not?

>> they do and the news out of new york, the jets looking to build a new stadium and move out of the meadowlands, the giants had been looking over the past year into renovating the stadium. the cost of renovating giant stadium, a 28-year-old building, would run them $300 million. if you’re going to spend $300 renovating, you might as well look at the cost of building a new one. they’re looking at the two options here, $300 million for renovations and you look at a new stadium, for example, in philadelphia, lincoln financial field, that’s a $500 million stadium, the eagles on the hook for $355 million of that. so this is a new deal the giants could look at, get the first naming rights sponsor to take away giants stadium, get a state-of-the-art stadium, luxury boxes, bring in more revenue and free themselves of the new york-new jersey exhibition authority.

>> any time i hear about the stadium it seems like it’s coupled with the possibility of pulling the team out of town, but no suggestion of that so far?

>> so far, no. the giants would be staying in the same location most likely. the jets would be moving out of town with a new stadium so the giants stadium would be solely giants stadium.

>> we’re weeks away from the summer olympics in the birthplace of it all, athens, greece. but i understand that the international olympics commitee is looking ahead to the 2010 and 2012 era, and early this week awarded the european broadcasting rights are significantly more than they paid last time. so why are european broadcasters paying more to air the olympics?

>> the european broadcast union which has broadcast the olympics since 1950 retained the rights for 2006-2008 and are bidding for 2010-2012, and this is the first time the broadcast rights have been put up for bidding. news corp. was the rival here, driving up the price 40%, looking at $756 million for 2010 and 2012.% the key being that they opened it up for bidding. news corp., the i.o.c. was worried they might put some of the events on pay-per-view so they awarded it to the european broadcast union again.

>> how does that stack up to what nbc has contracted to pay?

>> you’d think a 40% increase to $756 million would be significant but when you look at what nbc paid for the same years, $2.2 billion and that’s a record. clearly, the broadcasting rights with nbc, definitely lead over% -the baud casting rights in europe but still significant, a 40% increase for european rights.

>> i understand now that lance armstrong, of course, the tour de france, five-time winner, says he will skip the olympic games in athens, is that right? why is that?

>> a bit of a surprise. he’s competed in the last three olympics. after one of the stage races the other day he said he should hint he―he said he is not going to. if you look at the tour de france, it’s similar to france. tiger woods has said if they bring golf to the olympics, he wouldn’t want to play in it because the other tournaments are bigger events for him. so a sixth tour de france title for lance armstrong would be better than the olympics.

>> mike buteau, good to have you on, joining us from atlanta. we’ll get a preview of next week’s expected market action from the pacific rim and that and more coming up.

在线播报
Listen Market briefing --- Matt (slow)
welcome to “world financial report.” i am matt nesto. morgan stanley as we said, going to pay $54 million to settle a sex bias lawsuit brought by the equal employment opportunity commission. in addition to the monetary penalty, morgan stanley agreed to take “far-reaching steps that include appointing an internal ombudsman on to oversee diversity” and appoint an external monitor in charge of assessing the company’s compliance with diversity initiatives. the firm was accused of systematically denying women the same pay and job opportunities afforded to men since 1995. former bond seller, allison schieffelin, will get $12 million of the $54 million. the case is the first sex bias suit by the eeoc against the wall street bank to begin a trial. a jury of eight women and four men was picked friday and opening statements were about to start when the settlement was suddenly announced. morgan stanley denies it discriminates against female employees. also on the legal beat today, former credit suisse first boston banker frank quattrone has been denied a new trial. quattrone was convicted of obstructing justice and he claims the judge in the trial made errors in the legal instructions to the jury.

The earnings season
Interview: Westwood Holding --- Strategist --- David Spika
>> earnings at mutual fund companies may show increases of more than 40% this quarter. fund companies such as franklin resources, t. rowe price and legg mason are profiting from a 12-month stretch when the s&p 500 index climbed 17%. that gain in the market has seen their fees rise accordingly. the average gain for 10 of the biggest asset managers will be about 25%. the pace of profit growth may slow the second half of the year year. should investors scale back purchases of equity funds or the market decline. the earnings season underway in earnest next week. suzy assaad spoke with westwood holding strategist, david spika, about what he expects.

>> what we’ve seen is four consecutive quarters, assuming this quarter comes in over 20%, of over 20% earnings growth and the market is discounting the future. the market is looking ahead. historically, we have had very few periods of four consecutive quarters of strong earnings growth so this quarter is priced in and the market is projecting higher inflation rates and higher interest rates and does not see as robust growth in the coming quarters.

>> so if you have a market growing 20%, earnings growing 20% and you can’t get stocks to move up with that information, it doesn’t bode well for the future at least in your terms?

>> stocks did move up in anticipation of it. what we saw last year was 30% gains in the market predicated on the liquidity in the market and the strong earnings growth we were seeing. what happened was is the market started to correct in the second quarter of the year when we started to see interest rates go up. interest rates going higher leads to slower economic growth, which leads to slower earnings growth so we see the market as being very rational and it’s set the market up in a better position to make modest gains going forward.

>> what kind of modest gains do you expect?

>> we think that the market from here could do another 4% to 5% for this year. next year, we think it could be tough sledding. however, we think there are pockets in the market presenting better opportunities―the manufacturing segments of the market . we saw g.e.’s number today, up 22% on their industrial business. we think there’s a lot of opportunity to make money in the industrial part of the money, as well as energy. oil prices still up $20 a barrel although the saudis are pledging to pump more, we see high commodity prices, boding well for energy companies.

>> you mectioned―mentioned 4% to 5% for the year. given the fact that the dow is in deficit of 4%, you’re talking about a return of 3% overall for 2004. you would think there would be a better investment out there than stocks at this time.

>> not really, and the reason we don’t think so is because in a rising interest rate environment the asset classes that get hurt the most are those that are high-yielding type asset classes like fixed income, lie high yield bonds and reits. these are the asset classes that perform the worst in a rising or high interest rate environment. stocks, on the other hand, generally perform fairly well as interest rates rise until they get to the point where they start to choke off economic growth and that’s when stocks generally will trade down. so we have seen somewhat of a correction. that leads us to believe that the market ‘s healthier today than it was six months ago. however, we think that the rising interest rate environment and slowing economic growth will present somewhat of a headwind for the market . but we think equities are the best asset class to own today.

>> one technical trader, i was reading his note earlier today, suggested that the market has put in a major top for stocks and on a technical basis, a lot of stocks are failing to break through important resistance levels and the nasdaq has not been doing well technically on the charts. what do you think of that?

>> the market ‘s been in a trading range the entire year on the s&p, between 1100 and 1150. so we don’t do a lot of technical analysis but it is fair to say that the market ‘s been this a trading range and generally when you get into a range, you need some sort of positive or negative catalyst to push the market one way or the other. we don’t see anything significant on the horizon either positive or negative to push the market significantly out of that trading range, something in the way of much stronger earnings in the third quarter could be a positive catalyst. much weaker earnings or slower economic growth could be a negative catalyst but longer term we still do think stocks present a fairly good risk-reward tradeoff at this% -point and that modest gains of 5% to 10% a year for the next few years are realistic.

>> in other news today, james newson has resigned as chairman of the u.s. commodities futures trading commission, going to take over as president of the new york new york stock exchange―new york mercantile exchange, effective august second. during three years as chairman of csfb, newsome brought cases against .22 -- 22 energy companies, including enron and a unit of el paso, charging them with price manipulation and fraud. the new york giants could say goodbye to meadowlands and be moving to a brand new home. we’ll tell you why the team’s c.e.o. is considering a move instead of a renovation. up next in “money and sports.”

在线播报
Listen Market briefing --- Matt (slow)
Nasdaq --- Julie (slow)
Bullish news --- Bob (fast)
>> as advertised, it’s the “world financial report.” i’m matt nesto. recapping the day that was on wall street. three green arrows, .4%, .3% and .5% for the benchmark equity indexes on lighter-than-average volume, the fourth weekly decline in a row for the s&p 500. the nasdaq rebounded today, ending the week lower. julie hyman wraps it up from the market site in times square.

>> the nasdaq rose about .6% today, 11 points. however, it was down 3% on the week. it’s an interesting phenomenon because the decliners on the week were gainers today and led the market higher. we’re talking about software and semiconductors, in particular. some of the big software names that declined this week as they said their numbers did not meet estimates or would not meet estimates, including siebel systems, rose today. veritas software another example of that. siebel also upgraded at bernstien research based on the valuation. those shares down 40% for the year to date but not based on any change in the analysts’ outlook for the industry or the company after the company missed its second-quarter sales estimates. so those software names coming back. looking at semiconductors, the philadelphia semiconductor index was one of the worst performers on the week but had a good gain today. some of the various gainers today included intel. there had been worries and talk from analysts that the company may not meet its estimates in the third quarter. also, some of the other gainers today, xilinx. also looking at novellus systems, semiconductor equipment maker. first albany capital analyst said today that when the company reports numbers next week, it will come in at the high end of its estimates for sales. that is encouraging for some folks and those shares rose today. also on the semiconductor front, looking at nvidia, one of the worst performers for the week. schwab soundview saying that the taiwanese partners of the company have released their june sales figures and they have come out weak. they say it will be difficult for nvidia to meet its july quarter guidance and nvidia declining today and for the week.

>> bullish news from the trucking industry today. some investors, its importance extended beyond trucking firms themselves. several of the industries that are seen as highly correlated to the overall economy have reported bullish news and bob bowden joins me now with the story, or could we say highly corrugated.

>> thank you for that, matt nesto. besides traditional economic data, there are certain industries investors look toward to get a sense of the health of the economy. exhibit a, yellow roadway, the biggest u.s. trucking company and yesterday after the closing bell, it raised its earnings forecast for the second time in as many months. back in april, yellow expected 70 to 75 cents a share for the second quarter. on june 14, it raised the earnings forecast to a range of 85 to 90 cents a share and on thursday it raised the forecast again, this time not quantifying, but saying earnings will exceed the upper end of the already increased forecast. jason saidel follows shares of the trucking industry for avondale partners.

>> i think it’s indicative of the economy itself. yellow roadway is very levered to the economic strength and right now the month of june that just ended to close out the quarter was strong for many of the carriers and i don’t think it was any different at yellow roadway.

>> checking yellow roadway shares on the day on friday’s session, up 1.1%. the next industry correlated to the industrial economy, truck manufacturing. daimlerchrysler saying this% morning it will add 2,000 jobs at its truck factories in north america. elkhart cortez, head of daimler’s commercial vehicle unit, says those job increases are required to meet rising demand. and exhibit c, evidence of a rebound in another industry seen as a predictor of economic activity, the production of corrugated activity. one analyst says corrugated production increased in april and may and box production is well above what anyone would call historical trend growth, quantified at 2.6%. despite the rapid production levels, look at where we are with inventories. another analyst of deutsche bank% saying box inventories are only 3.8 weeks’ of supply, according to the most recent data, this, the lowest coigated box inventory level in 10 years.

>> i think it’s a great coincident indicator for what’s going on the industrial side of the economy. typically, if a factory is producing something, it often winds up going in a box. so when factories produce more goods, companies are lined up selling more boxes.

>> checking friday action of so-called pure-play corrugated box makers, smurfit stone and packaging corporation of america america, smurfit up and package corporation of america down. with jeff immelt describing this as the best economy we’ve seen in years, there are other bullish indication coming from a trucker, a truck maker and a group of corrugated box makers.

>> i like that plain-spoken analyst. it’s pretty obvious.

>> factories make things.

>> they put them in boxes. appreciate it very much. also today, at&t says it will pay the u.s. government $490,000 to end investigations into alleged violations of so-called do-not-call rules. that’s 37% less than a proposed fine last year. in return, at&t agreed to drop a lawsuit in washington federal court in which it sought s.e.c. records related to the $780,000 penalty proposed by the agency. intel, i.b.m. and apple among the companies in the s&p 500 that are due to report earnings out next week. we’ll hear from an equity strategist about what investors% -are expecting in terms of tech profit growth.

Adelphia fraud case --- Allan (slow)
Chart of the day --- Tom (slow)
>> the chief financial officer from credit suisse first boston is leaving the firm. her decision coming days before the new csfb chief executive, brady dugan, is expected to announce a new management team. this is according to a person familiar with the matter. she is 45 years old, the company’s highest ranking female executive and a member of credit suisse group’s executive board. a federal judge declared a mistrial in the remaining charges in the adelphia fraud case. allan dodds frank has been covering the trial and deliberations and joins us from lower manhattan with the latest. allan?

>> matt, judge leonard sand called a mistrial after the jury told him we have tried after no avail. after nine days of deliberations, they could not reach a unanimous decision about michael rigas and two counts of bank fraud and 15 counts of securities fraud against him. they acquitted him yesterday of one count of conspiracy and five counts of wire fraud. at the same time, they acquitted assistant treasurer michael mulcahey of all 23 counts and found michael rigas’s father,% -john rigas, former c.e.o. and founder of adelphia communications, guilty of conspiracy as well as fraud counts and securities fraud counts as well as michael’s% -brother, timothy, who was adelphia’s chief financial officer. we heard from michael rigas’s lawyer as they left the court.

>> it’s a good result for us. unfortunately, the government may retry him but i’m positive when they think about it and the acquittal on the counts, they won’t retry him.

>> i asked david kelly, the u.s. attorney who was in court, and he had no comment about whether the government will seek to retry michael rigas. earlier this week, outside the court on a bench, i talked off the record with john rigas and he said i could relate quickly on the record today what he said. he said that wall street had been too eager to give him money. he made a big mistake. they lent him billions and that ended up overleveraging the company, causing the collapse into bankruptcy and ultimately this trial that led to his conviction. matt?

>> thank you very much.% appreciate it.% if we plov on, here, now, another court-related story, m.c.i., emerging from the largest bankruptcy case in history in april, is suing former c.e.o., bernard ebbers, to recover $408 million in loans. the company, formerly known as worldcom, is seeking to dismiss ebbers’ $12 million claim against it. this, according to a suit filed in the u.s. bankruptcy court in new york. imagine this, if you will, $1.32 per euro, what goldman sachs forecasts for july of next year, making europe’s exports more expensive and threaten the franelile german economy, the subject of our “chart of the day.”% here with a discussion is our editor at large, tom keene. take it away, $1.32 per euro.

>> up 6.5%, a big move. here’s what’s happened in rapid order in a quiet summer week. the dollar was stronger and now we’ve seen the stronger euro in the face of somewhat tepid u.s. data. goldman sachs changes their u.s. forecast, lowering them. their currency team in london changes the dollar forecast, calling for a weak dollar into 2005. if we go to the chart, matt, you see the euro back to 2000. red is the trend line, above parity, a dollar per one euro. it all fits well on trend line. goldman sachs’ 2005 forecast is up here with the white circle at $1.32. so we say, so what, the starbucks coffee in london is more expensive and in paris you’ll face that this summer.

>> terrible.

>> but the serious issue here is a weak europe and germany reliant on exports, their exports become expensive, the german economy slows down and they may even have less inflation and you may get that deflation fear again in europe. so it’s complex.

>> if goldman is right, it would seem that would put the focus purely on brussels and the e.u. to do something.

>> it puts it on the political and economic experiments that is europe. this would be a real test. $1.32 euro, most of the experts i talk to say that’s the first big test of the european union.

>> it’s funny it used the word experiment because you have to remember how young that currency is and it is unchartered waters and they’re adding more members all the time, another dozen or so members.

>> 10 members.

>> 10 members coming in. will that be a factor?

>> here’s how it works -- germany, if they have the deutsche marc, could amend their strategy using the deutsche marc but they can’t amend the euro because they need the votes of the other nations so they have a limited quiver of arrows and limited tool box, so it’s an interesting experiment.

>> thanks, tom, cutting edge stuff from tom keene. also coming up, we’ll look at abbott labs, a company expecting sales of its humira drug to rise to more than $1 billion. that’s a blockbuster in the pharmaceutical circles. we’ll hear from the chief executive, miles white, about the growth strategy.

在线播报
Listen Market briefing --- Matt (slow)
NYSE --- Deb (fast)
G.E. --- Su (fast)
welcome to “world financial report.” i’m matt nesto. let’s give you those closing numbers. it was a wrap of a weekly trend of declines and deb kostroun joins us from the big board with a wrap of the session.

>> this week it was a shortened trading week with a holiday on monday, the july 4th holiday observance on monday. so a four-day trading week. next week, we’ll be runnering to work with 71 companies of the s&p 500 reporting their earnings, likely to provide a lot of direction for the market as we’ve been in a trading range for some time. the market , at least in friday’s session, flirting around that 10,200 area and closing just above it in the dow jones industrial average. one of the things that did help the market on friday, g.e. releasing its earnings, the biggest gainer in the s&p 500. second-quarter earnings a penny better than analysts’ estimates. we also saw technology performing well and remember, what we’ve been seeing in technology, as the market over this past week, when it goes lower, semiconductors tend to lead it lower and when the market goes higher, semiconductors lead it higher but we’ve heard a lot of news over the past week about intel, many analysts weighing in on intel and will they meet their third-quarter numbers. next week we’ll be hearing intel’s numbers for the second quarter. looking at other technology stocks, we did see unisys hitting a 52-week low after saying their second-quarter results coming in below their forecast. unisys at a 52-week low. also, other stocks we were looking at today, t.x.u. this is―shares of t.x.u., the largest power generator in texas, lower all day today. however, they did―they were lower mainly after a dallas tv station playing tapes of t.x.u. traders talking about taking advantage of a nearby municipal utility when they needed to buy power from time of the t.x.u. so utility stocks under water all day. back to you.

>> appreciate it. a record u.s. demand and concern about supply disruptions in asiaia, africa and the middle east combibed to push oil prices higher. inventories fell to a two-month low. a rocky―iraqi and nigerian oil shipments disrupted, and a tax dispute threatened to curb russian output. those nations account for almost 1/5 of u.s. oil imports. today, the price of crude oil was down about 1% in new york trade, significantly below $40 a barrel, however. some analysts say crude oil prices may fall next week, as well. we want to point that out, on rising output from opec. moving on to general electric’s higher-than-forecast earnings. the world’s largest company by market value says demand for plastics and engine parts and loans fueled the biggest percentage sales gain in almost four years. net income rose to 3.92 billion dollars from 3.79 a year ago. per share, 38 cents. g.e.’s chairman and c.e.o., jeff immelt, calling this the best economy he’s seen in years. su keenan looks at how the rosy outlook is affecting the stock.

>> lifting the full-year outlook. and general electric’s outlook often viewed as a barometer for the economy because of its diverse and global business. it is the world’s biggest maker of jet engine, power plant turbines and medical imaging equipment and leader in the credit card and aircraft leasing businesses. philadelphia trust company’s chief investment officer says when g.e. speaks, you listen. you can see healthcare earnings were up more than 30%. john waterman, chief investment officer with rittenhouse asset management.

>> what we’re hearing from g.e. is a lot of confidence in the business and in the economy. so that makes us feel good about owning the stock and about the outlook for the next 12 to 18 months.

>> steve hoedt, national city corporation’s analyst,, says the recovery in some of the weaker business units is key.

>> the numbers shows the economy has gained a bit of strength. i would also point to, within the company’s finance division, you can see the utilization rates for leased products they have that are economically sensitive also were very high in the quarter and that’s another good sign.

>> this is a week when stocks can use a good sign. the standard & poor’s 500 index fell for a fourth straight week, pressured by a series of companies saying earnings will be less than expected. shares of chipmaker conexant plunged as did shares of veritas veritas, both companies cutting forecasts. david sowerby with loomis sayles says g.e. confirms his view that second-quarter corporate earnings will be 28% higher than year ago levels.

>> corporate free cash flow is as strong as i’ve seen it since arguably 30 years or longer. top-line revenue growth up 11% to 12% compared to year-ago levels. there will also be weaklings in the group but this earnings environment, seven straight quarters of double-digit earnings growth, is arguably as good as i’ve seen since the mid 1960’s.

>> g.e. shares rose 1.5% today.

>> want to see cool g.e. graphics.

>> sure.%

>> i put stuff together on g.e. it’s an interesting company to look at and a lot of people loockeds at this company as an industrial but the fact remains that the company is doing more than half of its sales as a financial right now. you take a look at this first chart i’ve put together, i’ve compared it to industrial production for the heck of it. look at the correlation between the indexes rising, a 10-year chart. the white line is the industrial production index and you can see the two rising in tandem, pretty much until the year 2000 and pretty much falling in tandem. what you don’t see, though, is the recovery as much, the industrial production index back to just above its previous high. g.e. not even close to recovering from its all-time high.% so then, the second graphic that we looked at is more correlated to financials and this one really caught my eye. it’s the five-year comparison of g.e., which is the white line here, and the 10-year treasury yield. look at the overlap over a five-year period between g.e. and 10-year treasury yields, just something to talk about this weekend over cocktails. interesting and unusual. last but not least, technical analysis, courtesy of the bloomberg terminal. you see that red circle up top, that was that two-year high that we hit just at the beginning of the year. you can see that the stock struggled to get there and bounced back. also, one other thing i want to look at in terms of relative strength, if you were to look at the stock over the past year, overbought once, we’ll consider this one although it’s technically three overbought signals, and three times overbought but oversold only twice in the past year, most recently in march during this dip in the price right here. right now, we stand kind of in the middle. so the market really―or that relative strength index not giving you a clear buy or sell% -indication. that is the wrap, my way, on g.e. a mistrial in the case of michael rigas. we’ll go to the courthouse for a full report on that up next.