Market briefing---Lane (medium)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
Ebay---Bob (fast)
>> welcome to “world financial report”. i’m lane bajardi. glad you joined us. stocks rose pushing the dow and the nasdaq to the highest in more than a year. falling jobless claims and earnings from yahoo encouraged investors that the pace of economic and profit growth will quicken. running down the numbers for you the dow jones industrial average up 49 points at 9,680, the s&p 500 five points higher at 1,038. the nasdaq was up 18 at 1,911. volume-wise 1.5 billion shares changed hands at the new york stock exchange. 2,025 stocks advancing, 1,225 delining at the big board. 2 billion shares changed hands at the nasdaq. wilshire 5000 was up on the day by 54 points or a half percent. the dollar rose against the euro for the first day in four in new york but dropped versus the yen. the asian trading numbers are unchanged from the new york close. deborah kostroun is at the new york stock exchange, and she has more on today’s retail movers. deb.
>> lane, some of the things that we saw in today’s session, obviously september retail numbers coming in better-than-expected, helping out this strang rally. wal-mart sales up 6%. we saw other retail names performing quite well. target, their september sales up 7.2%, neiman marcus up a whopping 13.6%. they were only expecting a .6% increase, so that is very good. federated department stores up 3.2%, also boosting their forecasts. the retail performing quite well according to bill demonstrator of deutsche banc, saying that the arrival of cold weather, that last week in september, that was the big push. also above average comps on all of the retail names for september. also the strong apparel sales performing and helping things out as well. those coming in above average. also, those retail stocks , that was the biggest leader in the s&p 500. consumer discretionary stocks , that was the thing that helped every―that helped out the s&p 500, even though by the close of trading we did see some of the very strong gains being pared a little bit. also we saw gold stocks , while retail was the best performer, gold among some of the worst performers. however, you did see it performing quite well near the end, some of those gold stocks , even gold, the commodity, losing $6.20. gold gaining, as you can see. some of those stocks gaining towards the close as equities started to weaken. so that very inverse relationship definitely at work in today’s session. once again the dow and s&p paring those gains. however, the dow still hitting and still closing at that new 2003 high that we saw in today’s session. and it was a year ago today that it was the first birthday of the bull rally. it started over a year ago. and in this past year we have tacked on 2,350 points in the dow jones industrial average. the strong jobless claims, yahoo earnings, the september retail numbers really kind of helping things out in today’s session.
>> deborah kostroun at the new york stock exchange. four people accused of insider trading in shares of hispanic broadcasting have settled with the u.s. securities and exchange commission. the alleged trading took place better 2002 announcement when univision announced it would buy that company. robert hughes was one member. all four agreed to pay a total of $450,000 to settle those s.e.c. charges. none admitted nor denied guilt. yahoo led technology stocks higher as the nasdaq composite index closed at a level not seen since march of 2002. anthony massucci has details on today’s nasdaq trading from the market site in times square.
>> nasdaq investors were excited about yahoo this morning. the stock closed the day up 10%, at one point hitting a 52-week high. they beat analysts’ estimates at yahoo and raised the forecast. investors liked what they heard. the stock went higher. it really helped boost internet stocks . deutsche banc said hey, yahoo is a buy at this point. csfb, credit suisse first boston likes this stock to go to $50 over the next year, yahoo closing close to $43 on the day. other internet movers included amazon, priceline, ebay, those stocks getting a boost from yahoo. goldman sachs, the internet index of goldman sachs up 4% on the day. yahoo was up, ebay at one point hit a record high. it finished the day up about 3%. now, sonus networks up 6%. sonus equipment is used to carry voice and data over the internet. they reported their first ever quarterly profit as customers increased their spending, so internet stocks getting a boost. here we heard revenue more than tripled from last year. now, it wasn’t just internet going higher today. retail stocks were going up, september sales are coming in, same store sales doing better than investors were expecting. let me give you the children’s place, this stock up 24%. september same store sales rose 30%. analysts were looking for 6.5%, so as you would imagine, the reaction was to send the stock higher. the company also forecast fiscal third quarter profit that will exceed analysts’ expectations. that stock went up, one of its rivals gymboree closed higher on the day. a couple of other retailers, staples which trades on the nasdaq 100, that was up. kmart which trades at the nasdaq also rose. now, we spoke with anthony hitchler ad brandy wine asset management. he helps oversee 8.5 million. he said he can’t understand the valuation of the market in light of geopolitical changes and overleveraged economy. he went on to say the good news is that business looks like it’s recovering, but his strategy, move money out of stocks . once they’ve made money, he says take it out, look at stocks that are less expensive. the stocks he likes, pharmaceutical, retail, energy stocks , he likes those groups. he thinks they are relatively underpriced compared to others, technology shares. nasdaq up six of the last seven days, finish the day higher by 18 points. right now it’s at a 20 month high.
>> anthony massucci at the nasdaq where shares of ebay were rallying today, surpassing the record high reached during the height of the internet bubble, raising concern about renewal for online company. bob bowden looking at the ebay story joins me with more.
>> shares of ebay began trading in the heart of what’s now called the internet bubble, september 1998. a five-year chart of the stock shows crossing above that $60 per share mark that shares last saw in march of 2000. ebays’ earnings growth has been consistent and well ahead of its peers, the last four quarters in a row ebay has reported profit growth of at least 83%. earnings growth hat been at least 55% for 14 consecutive quarters. that’s led to a premium valuation, ebay shares trading at 81 times this year’s earnings more than double the forward p.e. of 39 for the nasdaq 100 and more than four times the valuation of the s&p 500 which is 19. to some investors the robust earnings growth justifies the high price of the shares. mark klee, manager of the 500 million john hancock technology fund owns shares of ebay. he says ebay has done as well or better than what was expected of it at the height of the bundle. and there are not many if any other examples of that. paul cook is director of technology investing at munder capital management. ebay is his third largest technology management. he says one area of growth will come from new kinds of products on ebay.
>> two years ago i told you cars would be transacted on the ebay platform and you would have shrugged and said there was no way. to date ebay sells in the the trailing 12-month time period more than $6.3 billion worth of cars.
>> while ebay shares have battled back to all time highs the same cannot be said for other so-called bellwether internet stocks . yahoo shares, though rallying over 10% on this session, are still 82% below their high of january 2000. amazon shares have done a little better, but still they are below $60 share. their high in february of 2000 was over $84. for the current quarter analysts predict ebay will grow earnings at 61%. jessica ki helps manage $2 billion atcoen, clingen steen and march. she does not own shares of ebay because of its valuation but sums up the ambivalence. if asked by a friend at a party what she thought about ebay shares, she’d say.
>> i would probably say there might be something out there that might have more upside potential than ebay, just because it is so highly value and has risen so much over the last couple of years. i would want to look for another opportunity at the same time. i wouldn’t be surprised if it continues to do ok just because it has such fantastic earnings.
>> the headline here, lane, is that ebay shares hit an all time high, higher even than the party of 2000. back to you.
>> where does it go from here, bob? where will it look to continue its earnings growth?
>> i’ll give you three battle points for ebay. one is corporate sales, instead of individuals selling their private record catholicses or model cars, corporations are using ebay increasingly. also international sales is a big growth area for the company. finally paypal, a method that people can pay each other who don’t have credit card processing machines, that is growing not just within ebay but elsewhere on the internet, in the internet world.
>> bob bowden, thank you. general electric reports its quarterly earnings tomorrow. this large-cap conglomerate is in so many businesses that many investors view the company as a proxy for the economy.
