Market briefing---Mike (fast)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
>> i will go so far as to say they did not give us all the information. it was not always accurate and it wasn’t full disclosure which we require.
>> a board fires putnum as it was accused this week of defrauding investors. welcome from our bureau in the u.s. capital, washington, d.c., i’m michael mckee. more on the mutual fund investigation in a moment. first, our top story today, the u.s. gross domestic product. markets got a boost after the government reported the economy grew at the fastest rate in almost two decades in the third quarter. the economy skpapded at a 7.2% annual rate from july through september, the fastest since the first three months of 1984 and more than double the rise of the prior three months. americans spent at the fastest pace in six years during the quarter with consumer spending up at a 6.6% pace, the most since the third quarter of 1997. business investment and equipment and software rose at a 15.4% annual pace, fastest since the first quarter of 2000. total corporate spending at 11.1% up. a $23.5 billion improvement in the trade balance. the surge in demand depleted inventories. stockpiles fell at $35.8 billion annual rate subtracting from growth. the rapid pace of growth produced inflation during the quarter. the federal reserve’s preferred indicator, personal consumption expenditure index, rose at 2.4% annual rate following .8% gain in the second quarter. the index rose at 1.8% excluding food and energy. costs for labor rose faster in the first quarter than in the second as benefit costs climbed. the employment cost index jumped jobless claims climbed by 5,000 to 386,000. companies are beginning to retain workers as the economy strengthens. the good economic news pushed the dollar higher against the major trading partners. also contributing, a treasury department report on whether china and japan were manipulating their currencies. the treasury said no. treasury secretary john snow told the senate banking committee negotiation is a better way to end those practices than confrontation.
>> the bush administration is aggressively encouraging our major trading partners to adopt policies that promote flexible market-based exchange rates.
>> snow said china is making progress toward more flexible exchange rates and the u.s. is actively engaged with japan in trying to limit intervention. snow repeated the u.s. has a strong dollar policy, although he didn’t define it. now, let’s get you caught up on the numbers today. as we said, the dow jones industrials, only major average finishing higher on the day. the dow up by 12 points or a little over .10%. the volume on the new york stock exchange a little bit higher than it has been. 1.6 billion shares on the day. those stocks gaining and declining were about even. the s&p 500 down just a point on the day. and the strong g.d.p. number having a positive impact on equities for a while, an impact that faded. deborah kostroun has been watching the ups and downs and talking to traders. she can tell us about their reaction to the news.
>> a lot of reaction, especially to the very good g.d.p., explosive g.d.p. number. we saw the dow jones industrial average at one point hit its best level of the year today. however, we didn’t close on that. that also very important. that’s our next bar, our next barometer for this market closing up only 12 points. what we were looking for is to see this market close up 39 points. that way we’d close at a new high. didn’t see that today. however, we did get a lot of confirmation about the economy and what is going on right now. an analyst with john hancock says people are looking for the pickup in the economy to justify where stock prices are going. he says this gives him more justification that the economy is definitely turning around and the fourth quarter will be very good. a lot of concern about g.d.p., not for the third or fourth quarter but into 2004. as we had a good g.d.p. number, helping out material stocks , they performed quite well. a lot of the economically sensitive areas of the market performed well. because we look at this rampup in the g.d.p. coming in well above the expected 6% gave us that confirmation. exxonmobil, however, on the other end of the spectrum. biggest drag on the dow and a big drag on the s&p 500. their profit fell short of analyst expectations. so we did see exxonmobil and other energy stocks a little lower in today’s session. exxonmobil said third quarter earnings rose to $3.6 billion. that fell short as natural gas output declined. also, transports. this was the best performing group in the s&p 500 and really kind of the airlines a big part of that picture. united airlines saying third quarter net loss narrowed to $360 million. they’ll exit from bankruptcy by the middle of next year. that provides impetus into the market. back to you in the studio.
>> deborah kostroun. let’s check the nasdaq numbers. nasdaq finishing lower on the day by about three points, a little over three points. volume on the nasdaq trading a little over two billion shares on the day. fairly heavy trading. anthony massucci standing by in times square at the nasdaq market site. anthony?
>> michael, to reflect what you were showing, the nasdaq just falling off in the last few minutes of trading on heavy volume. 2.1 billion shares on the close. declining stocks at 1,650. advancing stocks just un1,500. the nasdaq fell at four points on the day. leading the way down, hardware names lower. losing .75%. apple shares down 2.5%. we also saw biotech stocks going lower, losing a half percent on the day. let me show you an energy company here. power-one trades on the nasdaq. down 15.5%. sales will miss analyst estimates. the stock falling more than $1.50. telecom stocks , biotech stocks dragging the nasdaq. amazon losing 1.6%. in fact, the networking index was able to gain a half percent. we saw cisco systems gain. biotech stocks , there were a couple to mention that did gain. as the group went down, two i.p that came out of the nasdaq today. genetope with an 11% gain. answervax. on the day, biotech lower. the index fell .75%. yahoo showed a bit of strength. up 70 cents. nasdaq down for the first day in a week. back to you, michael.
>> anthony massucci. specialist tpeurbls may face a two-front war to convince regulators they’re vital to the trading system at the new york stock exchange. bloomberg news has learned that the securities and exchange commission plans to subpoena five specialist firms. the firms could receive the subpoenas within days. the move would expand the investigation of alleged trading vialss of the world’s biggest stock market. none of the firms would comment. earlier this month, regulators at the new york stock exchange threatened the firms with fines worth tens of millions of dollars for improper trading practices. exchange officials claim market- making traders caused some investors to miss out on the best prices for stocks or trade ahead of investors for their own profit. as we mentioned earlier, the fallout continues for putnam which is charged with improper fund trading. they’re losing a major client, the massachusetts pension fund. state officials fired putnam which managed $1.75 billion in pension phupbd.
>> i will go so far as to say they did not give us all the information. it was not always accurate. it certainly wasn’t full disclosure which we require. we were not satisfied they had given us everything.we lost some trust with them.
>> rhode island officials may fire putnam. a decision is scheduled for tomorrow. yesterday they became the first mutual fund company to be charged in the investigation. regulators say the firm aloud money managers to make short term trades at the expense of average investors. it’s a unit of marsh & mclennan. the dow jones industrial average is about 200 points away from hitting the 10,000 mark. the russell 2000 small cap index is up 39% so far this year. when we come back, we’ll talk to senior portfolio manager at first american funds and ask him whether the momentum will continue.
