Market briefing---Matt (slow)
Microsoft---Bob (fast)
NYSE---Deb (fast)
Welcome to “world financial report.” i’m matt nesto. regulators in the european union announce their decision in the microsoft anti-trust case today ordersing the software giant to pay fines and change the way it does business in europe, ending a five-year anti-trust investigation. bob bowdon joins me now with more on the day’s top story. bob?
>> i want to begin by saying it was not a big surprise. of course, this had been leaked to the press before exactly what the details would be. nevertheless, let us get to the news. european competition commissioner mario monti defendsing his decision in no uncertain terms at a briefing in brussels saying microsoft has abused its virtual monopoly power over the p.c. desk top in europe. this is not a decision we have taken easily or hastily. the penalties, microsoft was ordered to pay a fine of 497 million euros or $609 million, less than 2% of microsoft’s revenue last year. number two, share secret parts of the windows code with competitors so that the competitors’ applications can work as well with the operating system as microsoft’s own applications. microsoft was given 120 days to provide this information. and number three, offer a version of windows without a music and video player, the windows media player. microsoft haws given 90 days to offer a version without the windows media player and will not be allowed, by the way, to charge less for the version with the media player.
>> we are saying that consumers and p.c. hardware manufacturers ought to be able to decide which media player software they want to preinstall in their computers. they ought to choose, not microsoft.
>> in a release company video, chief executive steve ballmer defend his company by saying that innovation, rather than marketing savvy, as many people suspected, had driven the decision to include application software in windows.
>> there is an important principle at stake in this case. we believe that every company should have the ability to improve its products to meet the needses of consumers. the commission’s actions would essentially freeze our technology where it is today and that’s not good for consumers or for software developers. we will continue to work in good faith to try to address the commission’s concerns while protecting the principal of innovation.
>> microsoft said it will appeal the ruling which legal experts say could take two years. temperature u. could delay sanctions pending that appeal or, on the other hand, orders the penalties immediately effective despite an appeal process that would be going on. on this day, microsoft shares up about 1%. as i just mentioned to matt, it is not a big surprise that microsoft shares didn’t react much because much of the details of the decision had been released before today. checking shares of microsoft competitors, not a big reaction there, either. apple computer up about .8%. real net works up .2% and red hat up 3%. we should point out that red hat shares reacting to their earnings after the bell yesterday and that was more of the story for red hat.
>> yeah. no questions. it has been an interesting story. i don’t know if you saw this earlier, bob, i put together a couple of charts. people may not realize it, but shares of microsoft to talk about their underperformance, but the reality is they have 35% less sway over the markets today than they did 17 months ago. here’s how we come to that conclusion. that’s because if you take microsoft’s mark etc. cap of $260 billion and now accounts for 16% of the $1.5 trillion nasdaq 100 index, which is one-third lower than it was at its peak of 25% of the nasdaq 100 in 2002. you can see that decline in that particular graph right there. also, the same applies for the s&p 500 index. it is down about 30%. microsoft now equal to about 2.6% of the mark etc. cap of the s&p 500 down from a market value -- or a previous level of about 2% -- excuse me, 3.7% in 2002. well, let’s get to the closing numbers on the market here today. as we said, mixed markets douse and s&p down .1%, .2% respectively and the nasdaq lead higher by technology shares, computer-related shares pushing it up .4%. well, the strength in technology stocks just couldn’t push the dow and s&p higher today. deborah kostroun down at the new york stock exchange with the latest. deb?
>> well, as we closed out, matt, once again that losing streak for the dow and the s&p 500 continues. it is now five in a row. as well, we kind of look at the psychological 10,000 area in the dow jones industrial average, the last time the dow closed below 10,000, that would have been december 11 of last year. so, it has been quite some time and, of course, as the dow closing out at 10,064 today, just a little bit above that area. also, in today’s session, energy stocks really lagging on the day. we’ll get into that in just a moment. technology was one area of the market that did well. microsoft higher on their news. also hewlett-packard were up on a government win. take a look at the technology shares, i.b.m., it was one of the leaders in the dow jones industrial average in today’s session. buss technology performing quite well. and semiconductors, the semiconductors, they really have been leadsing this market lower. but at least for today, really helping to prop up the markets . semiconductors, one of the things they are watesdzing on, micron’s numbers after the close of trading. you can see it closed just a little bit lower and micron, their numbers had second quarter loss of four cents a share in comparison with the thomson financial number of a loss of seven cents. so, the numbers coming in better than expected. but the revenue seems to be a little bit disappointing. their second quarter revenue coming in at $991 million. the thomson financial estimate was $1 billion. so, you can see in the extended hours micron just a little bit loser. in today’s session, one area that actually also performed well along with those―most of the conduct cux, at least, that was the casino stocks. casino stocks had been performing quite well and today we saw another nasdaq stock. it was called ameri star casinos. they raised their first quarter guidance. a lot of analysts at deutsche bank saying the expansion of the slot machine gaming in california and also pennsylvania getting very close to being legalized. so, they’re moving very quickly. some of those gaming stocks have been performing quite well over the past year, gaining once again in today’s session. another stock saying that their first quarter will be doing better than expected, d.f. corporation, the maker of lee and wrangler jeans, also the janport back pax, they said their first quarter earnings will increase by 5%. energy stocks, that was the biggest laggard for today’s session, that was really on crude oil. we have been talking about crude oil, concern about those inventories, but the government saying today that u.s. inventories the rose for a fourts straight week and that signaled that prices near a 13-year high in new york actually attracting a lot more imports, at least that’s what its seems, and so a lot of the air let out of the tires, not only on integrated oil, oil services, but also natural gas. all of those stocks closing lower on the day as inventories coming in at a four-month high. back to you in the studio, matt.
>> i’m going to say, we’re going to have an analyst to talk about micron in more detail in the next half hour of the program. that sarksdze coca-cola is poning its launch of da sany bottled water in france and germany t. move follows last week’s health-related recall in the u.k. where its roll out was postponed indefinitely. coke withdrew dasani from stores in britain because some samples contained excessive amounts of a potentially harmful chemical. analysts say this may reduce coke’s european sales growth this year by as much as a third. coke is relying more on water and juice as soft drinks demand in north america slows. well, the s.e.c says puts unanimous investments should pay a financial penalty of hundreds of millions of dollar for what it calls the company’s agreen you fraud. the company and the s.e.c are arguing in an administrative proceeding over how big a penalty putnam should pail for failing to stop six of its fund managers from allegedly marketing or making market timing tradeses at lowered returns for shareholders. putnam says the penalty is sought by the s.e.c is wildsly disproportionate when measured against previous cases and relevant laws. well, a judge is rejecting the first request by italian prosecutors to indict parmalat’s founder and bank of america’s italian unit. the rejection is a major setback into the investigation of italy’s largest bankruptcy. the judge is also rejecting the indictment of awe ditsing firms in deloitte and tuche and grant thornton. the judge could not be reached for comment. my next guest mansion $5 billion in large-cap value stocks. when investing, he looks for restructuring companies, names like tyco are on his radar screen. we’ll talk to kevin mccloskey, portfolio manager at federated investors about tyco and the broader markets . that is all coming up after this break.
