Market briefing---Lane (medium)
Nasdaq---Anthony (slow)
>> welcome back to “world financial report”. i’m lane bajardi in new york, recapping the day on wall street. dow jones industrial average up 25 points, or quarter percent at 9,061. the s&p 500, also a modest rebound, up 1.5 at 967. nasdaq composite down another 20 points, 1 1/4 percent at 1,652. check out u.s. treasuries, the 10 and five-year notes, 10-year note up nearly a full point, 4.27%, the five-year note was up 13/32 yielding 3.13%. three-year note up a quarter point, two-year note better by an eighth of a point. quick view of the currency trading at the moment, not much movement for the dollar at all. merck, the second biggest drugmaker plans to spin off its pharmacy benefits manager medco health solutions this month, that after cancelling an i.p.o. in april because of lack of investor interest. medco is scheduled to begin trading friday on the new york stock exchange under the ticker m.h.s., but trades won’t be recorded until the spinoff is complete on august 19th. spinoff is contingent upon s.e.c. clearance and a $2 billion payment which medco will borrow to provide. merck shareholders will receive a special dividend of 0.12 shares of mode ko among approximately 50 pharmacy benefit companies, merck medco is the largest by sales. revenue rose $33 billion last year. number two advanced p.c.s. handles more patient. sales at advanced p.c.s. have climbed more than 14 billion in the latest year, compared to 500 million in 1998. the c.e.o. predicts there will be consolidation in the industry but welcomes the medco spinoff.
>> we applaud merck’s move to finally spin medco out. we have said consistently that we think it’s inappropriate for pharmaceutical manufacturers to own p.b.m.’s because of the inherent conflict of interest of wanting to promote parent companies’ drugs, so we are anxious to see the spinoff finally occur. in terms of any near-term changes in the competitive landscape, we kont see much on the horizon.
>> now, shares of merck rose while advanced p.c.s. fell 3% on the day. credit swiss analyst kevin berg says the total stock value of medco may be about 6.1 to $8.3 billion as a stand alone company. medco remains under investigation under claims it has violated federal and state consumer laws.
>> cisco system shares were the most active on the nasdaq, trading 127 million shares and falling more than $1. here with more on cisco is anthony massucci at the nasdaq market site.
>> it’s possible that cisco disappointed some of the more aggressive investors. we heard this comment from eric gustafson who manages $150 billion. they own 3 million cisco shares. he’s saying maybe investors were disappointed. that’s what it looked like today with cisco falling 6%. even with the nasdaq looking like it might go higher at one point, cisco stayed lower all day long. the reason why might be because of what investors heard from chief executive at cisco, john chambers. he said while he’s more optimistic than he has been in two years, demand may not accelerate any time soon. he also said demand remains fragile, in his word. rob see bert at victory capital which also owns cisco, he said cisco has beaten analysts’ estimates by a penny over the last couple quarters so investors have gotten used to that. with that when they saw the numbers matching what analysts expected they started selling shares. that came this time yesterday. in the face of this investor concern, the stock was raised to an outperform over at wachovia securities. in fact, they raised their 2004 earnings and sales estimates. something to keep in mind. cisco shares fell today. with that fall, we saw the nasdaq down four times in the last four days. actually out of the last seven days it’s been down six times. you are seeing the nasdaq really turn. one of the stocks that fell today, check free. this is a software name, falling 20%. basically the company said it expects a quarterly loss on slumping demand from banks, fewer banks buying its financial software. that knocking the software stock . genesis microchip, this stock also fell today. the plan here is that pixel works dropping its plan to buy the company for $514 million with the plan being cancelled, the stock fell and sirius satellite radio also fell. again, the nasdaq down four days in a roa. back to you in the studio.
>> anthony massucci. hair ras entertainment chief executive said midwest legislators are killing the casino industry with tax rates on revenues as much as 70% in some states. they said the rates are highest in illinois where they may close some casinos. hair raw’s second quarter profit fell 11% because of the high taxes particularly in illinois, iowa and st. louis. but lud man says hair raw’s other casinos became profitable.
