Market briefing---Bob (fast)
NYSE---Deb (fast)
Mr. Grasso---Carmen (fast)
new york state’s says richard grasso has been a very good advocate for the new york stock exchange and a good administrator. but he’s also a regulator. regulators do not get paid $198 million. they don’t get paid by the people they are supposed to regulate. that creates the perception of a conflict of interest. and so in this campaign to make sure that we cleanse corporate america of these corruption scandals, he has lost credibility. so it’s with sadness that i join my colleagues fill angelides, treasurer of california, richard moore, the treasurer of north carolina and others in saying it’s time for him to go.
>> he says wall street scandals have cost new york’s pension fund $9 billion in lost value. well, our deborah kostroun is at the big board as usual, with a wrapup of the action there. dep, what seems to be today from the perspective of the floor on this story?
>> well, in fact, bob, obviously as this story seems to be brewing and getting larger, obviously many members here on the trading floor seem to be really kind of focused in on that. obviously in today’s session as we did see calpers coming out and asking and calling for the resignation of richard grasso, also three of the top pension fund managers calling for grasso’s resignation, that really kind of speaks from the customer aspect. obviously people from the trading floor really upset about the whole situation really want to get business done and see this matter cleared up as soon as possible. obviously a ways to go as we do have this member meeting coming up on thursday. it’s been highly publicized, not open to the media, but obviously many floor traders and members will be able to air some of thear concerns about this. obviously one of the things as what we are seeing, a lot of focus on that, even today in this fed decision, a lot of people focusing in on this controversy, and headlines about calpers coming out at the same moment. at least for today we did have the fed decision, kind of uneventful in the fact that we didn’t see a decision coming out from the fed other than just leaving interest rates unchanged. however, the market really responded. we saw the dow jones industrial average rallying that whopping 118 points. what we did see, financials performing well. financials.my goodness. we haven’t talked about financials in so long. in fact, morgan stanley hitting a 52-week high today. remember financials really kind of in the leadership position early on since the low on march 11th. but obviously semiconductors taking over. bear stearns also reporting their earnings before the open of trading coming on thursday. also food and beverages, one of the only areas of the market that we did see loss, coca-cola fizzling on the thomas weisel downgrade.
>> i notice that coca-cola sizzling reference. thank you for that, deborah kostroun, peninsula for this afternoon. traffic is picking up along the outerbanks of north carolina which could be where isabel comes ashore. while residents prepare for a devastating storm, insurance stocks are outperforming, the reverse of yesterday when they led stocks lower. carmen roberts joins us with a look on the hurricane effect on those insurance stocks .
>> hurricane carmen may be in some words. well, nervousness gripped the market when it appeared isabel might slam into the u.s. shore with 135-mile-an-hour winds. property and casualty stocks sank as isabel grew closer. she’s weakened to a category 2 storm with winds around the 105 miles an hour, far from hurricane andrew’s 165-mile-an-hour winds in 199. that category five storm ripped across south florida causing $15.5 billion in damage, $20 billion in today’s dollars. yet isabel could still cause substantial daj, and if severe enough analysts say it could be the driving force for property and casualty insurers to raise rates. u.b.s. says in a note to clients rates may rise as losses to isabel reduce industry capacity. keep in mind there is a lot of capacity in the industry, $260 billion worth, according j.p. morgan analyst hugh worns. after talking to insurers and reinsurers, warrant says isabel would have to cause more than $10 billion in damage in order for it to go up. tisha jackson with u.s. trust agrees and points out that property and casualty rates are already at historically high rates.
>> catastrophes are good in a bizarre way for property casualty companies, because it makes it so that the companies remember that big losses can occur, and it helps maintain pricing.
>> ever since isabel started making headlines last wednesday, wall street had been factoring in the cost of the storm. by this morning warrants at j.p. morgan said they had built in an enormous event costing $24 billion. there is no way it’s going to happen. that fig dropped as isabel weakens and insurance stocks rose. u.b.s. estimates isabel insured losses may be $4 billion given that she is expected to make landfall in roughly the same area as floyd and hugo with about the same intensity. while there is a lot of uncertainty about isabel and whether she’ll strengthen back into a more deadly version of herself,le many analysts agree this past week’s pullbeing in insurance stocks is a buying opportunity. bob, back to you.
>> thank you, carmen roberts. when we come back we’ll talk to the c.e.o. of the world’s second largest aerospace company and the biggest stake owner of airbus.
