Market briefing---Mike(fast)
Legislation---Peter (slow)
>> welcome back to “world financial report.” i’m michael mckee. a mixed day on wall street. the dow jones industrials down by 15 points, a loss of about .1% at 10,048. the s&p 500 down for a fifth day in a row, a loss of over two points at 1,091. nasdaq finished higher by a little more than seven points at 1,909. most actives on the new york stock exchange all down on the day. general electric, calpine and caremark. a mixed report on u.s. durable goods orders for february and the third fastest pace of new home sales on record. that’s the economic news today. orders for goods made to last at least three years increased 2.5% after a drop of 2.7% in january. excluding transportation equipment, though, durable goods orders declined .3% in february. unfilled orders which game the ability of manufacturers to keep pace with demand increased .6% in february. they were up .7% for business equipment, biggest rise since october. bookings for non-defense capital goods excluding aircraft, a proxy of future business investment, rose 1.1% last month. this after a .3% fall in january. onto new home sales. they increased 5.8% to 1.063 million. that exceeds the record from last year. purchase of new homes exceeded an annual rate of one million for 18 of the past 19 months. the median price of new homes jumped to $205,500 from $196,100 in january. atlanta federal bank president jack guynn saying the fed will have to lift interest rates. the central bank has good reason to leave the benchmark interest rate low for now, he said. but if my forecast for more robust economic growth materializes, then at some point a fed funds rate of 1% will no longer be the best poll seufplt i don’t want businesss to build their plans on expectations of a continuation of accommodative monetary policy without regard to process speculative economic conditions or changes that may need to accompany them. although aggressive in upgrading equipment, companies do remain cautious in hiring he said, and that should change as productivity gains slow. guynn’s comments helped bush bonds lower. 10-year down an eighth right now at 3.71% for the yield. on the shorter end of the curve, not a whole lot of movement today. three-year note up a tick. two-year note unchanged. yield is 1.46%. the euro had its biggest drop in three weeks against the dollar. european central bank president telling a german newspaper the bank might be lowering its economic growth forecast if consumer demand fails to accelerate in the 12 nations that share the common kurpb seufplt traders took that to mean news of a possible rate cut ahead. future of a $145 billion corporate tax bill in congress got clouder today. a fight over new bush administration overtime rules derailed a planned vote on the tax measure in the senate. peter cook has been watching the debate. he joins us from washington with more on the implication of today’s developments. peter?
>> well, mike, this legislation amounts to the biggest change of corporate tax rules since 1986. it has bipartisan support in the senate. it got derailed when democrats tried to make one specific change. the bill’s primary aim is to remove a u.s. export tax break. the world trade organization ruled it is illegal. that ruling aloud the e.u. to levy sanctions on as much as $4 billion in punitive trade sanctions on the u.s. the first duties took effect this month. the legislation would replace the tax break with other changes including a 3% reduction on corporate taxes paid by manufacturers. democrats pushed to add an amendment to block overtime rule changes favored by the white house, a change the full senate has already approved once in response where republicans tried to end debate on the whole bill and prevent the overtime amendment from coming up. they failed to get the 60 votes needed.
>> every day that we delay action on this bill is another day that american jobs are at risk and every day of delay is inexcuseable.
>> telling eight million americans they’ll lose their overtime is not right. all we’re suggesting today is to give us a vote.
>> now the immediate implications, e.u. sanctions will continue and rise 1% a month from the current 5% until congress takes action. the first $200 million in duty targeted jewels made by tiffany and lumber produced by weyerhaeuser. the extension of a research and development tax credit and one- time tax holiday on money earned overseas that supporters estimate could bring more than $300 billion back to the u.s. remain up in the air. the stalemate leaves the bill’s future in doubt.
>> waoeu not expect or have no expectation that this would be sent before or sometime this summer and many predict fall or later.
>> now in the meantime, maiming u.s. exporters like boeing and microsoft will continue to utilize the export tax break which allows companies to exclude from federal income tax 15% of net income from the export sale of u.s. goods. mike?
>> peter cook, thank you. speak of microsoft, the european union fined them $609 million and ordered them to share secret programming information with competitors. we will talk to a microsoft shareholder about what that may mean for the company and what is next for microsoft. matt kelmon joins us next.
