Market briefing---Mike (medium)
NYSE---Deb (fast)
Telecom---Su (fast)
Nasdaq---Anthony (slow)
>> welcome to “world financial report”. i’m michael mckee. computer-related stocks rose, boosting the nasdaq to a 16-month high. semiconductor stocks surged on optimism that growing demand for p.c.’s will boost earnings. let’s get to the numbers. the dow jones industrial average the only one of the major averages today finishing down, almost 7 points on the day, s&p up fractionally, while the nasdaq rose almost 12 points on the day taking a look at volume barely crawling over a billion shares on the new york stock % -pexchange. on the nasdaq, much the same story, 1.3 billion shares on the day. the wilshire 5000 finishing up almost 15 points on the day, while the strongest―while in the treasury markets we saw treasuries fall about a half for the 10-year note. a yield at 4.53% on the shorter end of the curve, much the same story. treasuries declining on speculation the growing economy will boost inflation, even if the government bore rose more money to finance a record budget deficit. taking a look at currencies now, the dollar up against the yen on the day, and down against the euro/dollar and the pound. deborah kostroun down at the big board today. deb, the story was prt ti much no story. nobody wanted to trade.
>> that’s exactly right, mike. what we did see was kind of what we didn’t see. phil ser ricoh of le branch specialists saying we were drifting today on very light volume. he says don’t be mesmerized even if tomorrow’s session you see the market kind of moving around because he says we could kind of drift in either direction, and that, because he says really there are not a whole lot of players coming into the market, kind of a trader’s market so to speak. volume just barely crossing 1 billion shares. and in fact, some of the interest that we did see coming out of the semiconductors in today’s session, also remember that philadelphia semiconductor index, it is still performing quite well year to date. and in fact the philadelphia semiconductor index year to date up about 60%, one of the best performers year to date. what we did see, national semiconductor up, mainly as they did get an upgrade from lehman brothers. also motorola ending unchanged, even though they actually got a downgrade. fairchild semiconductor actually ending up at a 52-week high in today’s session. in addition, while we did see semiconductors the best performers in the s&p 500, on the other end of the spectrum we saw insurance stocks some of the worst performers with a.i.g. leading ta. other financial stocks also a little bit of a drag in today’s market. also gold and silver. this was one area of the market that performed quite well. as this market has really been trying to find a little bit of direction, we’ve been seeing a lot more strength in gold and silver. also, the dollar has been performing quite well, as well in gold and silver, it seems to be performing well. home builders generally lower in today’s session, this after the mortgage application index falling to its lowest level in 14 months, as home builders a little bit lower. also mortgage lenders a little bit of a mixed market as well in today’s session. back to you in the studio.
>> deborah kostroun. higher mortgage rates have taken a toll again, speaking of mortgages. applications fell 13.3% last week to their lowest in 14 months. refinancing was down even more, 21.3%, also to the lowest level since june of last year. two months of rising interest rates have so far hurt refinancing more than home% -pbuying, and that could be a drag on the economy because refinancing is an important source of cash in consumer spending. telecommunications companies, one of the industry’s hardest hit during the bear market, may be poised for a comeback. that’s the view of one analyst who says the aggressive marketing of new phone plans by sprint and its rivals is part of the turn around story. bloomberg’s su keenan is with us with more. su.
>> the analyst is friedman, billings, ramsy’s susan calla. she says the recession in telecom is over. in the past month she has upgraded more than half a dozen companies including verizon, sprint p.c.s., at&t wireless and nextel, upgrading them all to outperform, saying these companies have greatly increased both cash flow and cost cutting discipline. her top pick in the industry group is nextel. shares have doubled in the past 12 months, up 119%. and she says sprint p.c.s. is the bottom of the first turn around story, best poised to recover from years of slow growth, she says. more than half the analysts surveyed by bloomberg, rate that wireless tracking stock a hold or sell. sprint and its rivals are now aggressively trying to reverse the trend of slowing revenue growth. and sprint, the third largest long distance company is introducing bundled local, long distance and wireless calling plans. these are new plans in 36 states all in an attempt to gain a bigger share of the market. susan says such promotions are working, and she makes this bold prediction. the telecom stocks will be the strongest performing industry group of 2004.
>> the growth in wireless is completely off the charts. the growth had slowed down previously as the companies were wrestling with their leverage situation.they all had a lot of debt. but they pared back on cap-ex they’ve all become free cash flow positive, if not, they will be in the next quarter. and they’ve really accelerated their marketing.
>> an example of the accelerated market is at&t’s use of the enormously popular american idol television shompt you are looking at past winners in their recent movie to promote its text messaging service. in this year’s competition you look at all the wanna be’s outside the new york convention center. just as last year’s viewers were being encouraged to phone in their votes with text messaging. for at&t wireless and competitors such as singular and verizon wireless, the biggest u.s. phone companies, those text message users represent the future. last year text messaging generated about $300 million in revenue here in the u.s. to give you an idea of the growth potential, that’s just a fraction of europe’s $10 billion market in text messaging. the wireless carriers are also pushing other services, including viewing photos, watching videos and surfing the internet on mobile phones. so stay tuned. more ahead and we’ll continue to follow this story. back to you.
>> su keenan. the nasdaq closed higher for the second consecutive day. it’s trading higher for the week so far. here with a wrap on today’s trading is anthony massucci in the nasdaq market site in times square.
>> with today’s move on the nasdaq, keep in mind we are talking lots about low volume, folks on vacation. the nasdaq just 30 points below its 16-mokt month high which it hit last week. today we saw semiconductor stocks lead the way higher, up 3% as a group. let’s talk about novellus, xilinx, linear technology, those three stocks all up more than a dollar. focusing in on novellus, they have their mid quarter call tomorrow.we heard from merrill lynch ahead of the call. they said don’t expect sales or earnings outlook changes for the company. do expect them to emphasize the change or possible change in demand coming. they say optimism may increase the end of the year. that coming from merrill lynch today, ahead of tomorrow’s novellus call. networking stocks also a strong rally today. 3com helped boost the groumpt the company which makes computer networking gear was upgraded over at u.s. bancorp to a market perform, up from an underperform. some of the networking stocks rose. juniper, ciena, comverse technology. those stocks rose on the day. also gold stocks with that $8 move in gold today on the nasdaq you had gold stocks like rand gomd resource, royal gold, those stocks going higher. durban roodepoort. pan-american silver hit a 52-week high, a silver company that trades here on the nasdaq, so the precious metal stocks performing pretty well, along with the tech stocks , which is unusual for some folks to notice. nextel, telecom stocks , bank of america david barton said he’s initiating coverage. he’d like the stock to go about $1 higher for the year. they attract double the revenue as they see in the industry. but there might be some risk to the business model, so caution there on nextel from bank of america. back to you in the studio.
>> anthony massucci. our next guest is a garp investor, investing in stocks that have what he considers growth at a reasonable price. john caldwell, chief investment strategist at mcdonald financial will tell us why 5% of his portfolio is in cash.
