Market briefing---Bob (fast)
Mr. Grasso---Su (fast)
NYSE---Deb (fast)
>> bob, california treasurer phillip angelides today condemned richard grasso’s controversial pay package and predict today chorus from fund managers will keep getting louder.
>> it’s important that mr. grasso resign and do it quickly. it’s important that this pay package in conjunction with that rez igs be revised and appropriate. then it’s important that the new york stock exchange do all that it can to restore its credibility before the american public and investors across this world.
>> angelides sits on the boards and was joined by managers of calpers and callsters with a total of $245 billion in assets.
>> we are insensed at what’s happened at the new york stock exchange with respect to the compensation package that has been rewarded to mr. grasso. we believe that it does exactly the opposite.
>> north carolina’s treasurer richard moore and new york state comptroller also called for grasso to resign today. we will have an interview with heveasey later. a different view from roderick hills who served as s.e.c. chairman from 1975 to 1977.
>> he certainly didn’t do anything illegal. he didn’t do anything that was not authorize bid the governing body of the new york stock exchange. he did something nd’s light seems excessive. it’s excessive. it’s excessive unless you look in the light of how many other pay packages we’ve seen around the country.
>> it is his view grasso does not need to resign. all of this comes as the new york stock exchange considers a number of steps to restore confidence following last week’s disclosure that grasso’s total compensation came to $188 million before he agreed to forgo the $48 million that neither the public nor some of the board had known. among the proposals now being considered, the addition of new directors to better represent floor traders and public investors. h colin mccall, the chairman of the governance committee said positions probably would be set aside for investors as well as exchange investors who lease their seats. the board is made up of 12 securities and industry executives and 12 so-called public directors. steven hall, an executive compensation expert says this could be a giant step in the right direction in terms of addressing conflict of interest concerns.
>> the charge is that you didn’t have people that were truly independent, that for a period of time mr. grasso was selecting them. therefore he was selecting the people who were going to decide his own pay. that doesn’t cut it for good governance, wouldn’t cut it for a publicly traded company.
>> sarah testlick is among those who say this move of adding new board members does not go far enough. she says the exchange’s problems stem from its dual role as both marketplace for securities and regulator of securities firms. the three board members, by the way, there are three board members, bob, said to me thursday to gauge the sentiment of floor traders. we’ll be on top of that and continue to bring you updates throughout the hour.
>> su keenan continues to follow the grasso story. deborah kostroun is at the big board where the controversy is heating up. what’s the feeling on the floor regarding the richard grasso story.
>> certainly bob, it really kind of took a lot of focus out of today’s session as even when the fed decision was coming out we saw many traders really kind of looking at the screens and also looking at some of the boards around, looking at some of the headlines coming out about calpers, and as calpers coming out and asking for the resignation of dick grasso. so that obviously really kind of brings the customers into the fold, and so many traders that i talked to really saying now that you have the customer in the mix that really adds a different dimension to this. obviously we do have that meeting with floor personnel and also with members coming up on thursday. in fact, many traders that i talked to say said that they are going to be on the front row of that. the front row definitely is going to be pretty filled up from the indications that i’ve been getting so far from that. but obviously that aside, the fed rate decision really as many raiders are talking about a little bit uneventful. however, we did see this hung huge rally though the fed is leaving rates unchanged. this huge rally puts us into another trading range here. what we are looking at we saw on the upper end of the range that we did see on september 4, 9,609 that was an intraday high, closing the market however on that day at 9,587. so getting close to some of those very critical levels. one part of the market that performed quite well once again, it has been performing well since the low on march 11, that is the semiconductors. when the market goes up, semis go up. when the market goes down the semis go lower. we saw semiconductors among some of the best performers. in fact, that s&p semiconductor and equipment index, up 67% year to date. tech hardware, other big gainers as well in the s&p 500. insurance, a little bit of a turnaround that we saw there. insurance names, of course, they lost so much yesterday mainly because of the concerns about hurricane isabell and what that might mean to many of their profits. however, insurance performing quite well. and also media stocks also seeing a turnaround. dow jones getting an upgrade and tacking on some very impressive gains, really throughout the whole market today. back to you, bob.
>> thank you, deborah kostroun. we have breaking news on the issue of chairman richard grasso chairman of the nyse. mr. langone, nyse director kenneth langone says he would vote for grasso’s pay package again. we should point out kenneth langone had chaired the nyse compensation committee from 1999 until last june. he made hicks remarks through a spokesman and said his support for richard grasso is unequivocal. well, moving on, federal and new york state authorities are charging a former bank of america employee of setting up an illegal scheme for trading mutual funds. theodore siple, one of at least five bank employees who lost their jobs after the investigation into aftermarket tradings of mutual fund shares began. new york attorney general eliot spitzer said siple allowed the canary capital partners hedge fund to trade mutual funds at prices not available to the public.
>> mr. si polled participated in a scheme whereby canary was permitted to place orders after 4:00, and mr. si pel and others at bank of america would authorize the orders and insure even though the orders were placed after fourth quarter, nonetheless mr. canary and mr. stern were able to get the 4:00 nav contrary to the laws we have articulated in the past.
>> mr. siple is the first charged in the investigation. canary partners agreed to pay a $10 million fine. the fed voted unanimously to leave the benchmark interest rates unchange at 1 person to give the economic expansion more time to speed up, the lowest in 45 years. federal reserve policymakers said spepding is firming, though the labor market is weakening.
>> they just need to wait and see. does the economy begin to gather momentum, do the tax cuts continue to propel consumer spending, do we finally get corporate america to start hiring again? if that doesn’t happen the fed can go back to its traditional medicine and we’ll see further rate cuts.
>> policymakers again split their statements outlook for growth. they cited weak pricing power as a factor that may lead to additional interest rate cuts. consumer prices in the u.s. rose for a third straight month in august. the 3/10 of a percent climb in the labor department’s index was marked by higher costs for gasoline, prescription drugs and college tuition. airfares and computers were cheaper in the month. backing out energy and food costs the core index rose 1/10 of 1 percent, compared to 12 months earlier, the core index is up 1.1%, the smallest one-year gain in almost four decades. u.s. stocks rose after the fed kept its benchmark interest rates at those 45-year lows. that bolstered confidence economic and profit growth will accelerate. let’s get to the closing numbers as they have settled on this tuesday afternoon. we saw the dow jones industrial average up 118 points. the s&p 500 was up 14.5 to 1,029. the nasdaq was up 41 points to 1,887, up by 2.25%. checking volume on the day, nyse volume at 1.36 billion shares, advancers beating declines by three to one there. checking the nasdaq volume, heavier than usual, 1.78 billion shares traded. well, moving on, when we come back after this commercial break the fomc does the expect and leaves the benchmark interest rate unchanged.
