Market briefing --- Matt (slow)
NYSE --- Bob (fast)
Nasdaq --- Julie (slow)
S&P --- Su (fast)
welcome to “world financial report.” i’m matt nesto. one strategist says the economy is red hot now. another says the manufacturing sector is on fire. well, today’s numbers blew away expectations. durable good rising 3.4% in march, almost five times what the median economists estimate was. and that report sent treasuries down on speculation that the fed will need to begin raising interest rates perhaps in the third quarter. fed chairman―or fed vice chairman, roger―rather, roger ferguson, was was the latest to hint that things were changing in monetary policy. he says restrains on inflation and the economy are beginning to ease and the fed can’t be complacent about the powerful on set of price pressures.
>> the process of disinflation appears to have ceased and inflation has apparently stabilize. however, we cannot be complacent regarding inflation and inflation expectations. should the federal reserve conclude that the maintenance of price stability is in jeopardy, i am confident that it will act appropriately.
>> well, checking on today’s numbers, you see the impact on the bond market . the yields on the 10-year note back almost to 4.5%. five, three, and two also on the rise here today. durable goods data also sent the dollar higher against the euro for the biggest weekly gain since february. you see the dollar buying less yen. the euro and the pound actually both down. well, let’s turn back to the stock market if we can, wrap up the dow, the s&p, and the nasdaq, all finishing up. particularly the nasdaq. no change really to speak of. .6% of a minority and a comparable percentage move for the s&p 500. the dow only .1% higher. but also of note today, shares of microsoft. not only for a 6% gain, but also for the out right demand that was in the marketplace. nearly four times the average daily volume in microsoft traded today, a staggering 252 million shares. to put that into visual perspective, the bloomberg. there you see, as i can zoom this in, you can see the spike in the volume. in fact, this is only a six-month chart. but you’d have to go back almost five years to the year 2000 before you found a single day’s trade that matched that increase in shares of microsoft. bob bowdon is at the big board with a wrapup of the week that was. bob, what do you have?
>> indeed, matt nesto. wanted to wrap up that week. the biggest gaining sectors on the week is how i’ll begin. what better way to begin a wrapup of the week? auto was the best for the week, followed by software and software services and finally telecom services. let’s take the sectors one at a time. the auto group was driven by strong earnings from ford, visteon and g.m. delphi, by the way, did not report earnings this week, but the stock went along for the rides, if you’ll excuse the pun. ford shares were the stand out on the week, up there you see there that 5%. actually, i think it was more than that on the week. i think it was 19% on the week, in fact 10% on wednesday alone ford shares. one of the software stocks moving to that on the week, saber holdings―i don’t see it on that list, but the travel, reservation and ticketting company, its shares were up 9% on the week after forecasting 2004 earnings between $1.30 and $1.35 a share, analysts looking for $1.27. s.b.c. communications stock was also up 5% on earnings news, specifically up 5%. the worst performing groups for the week included can real estate, financials, and energy. you see those in terms of the red arrows there for the week in terms of very sectors. let’s break these apart one at a time and show you the biggest movers. real estate stocks and reits fell as the specter of higher interest rates and, therefore, heyser mortgage rates deflated some of the names in real estate. finance prbles also suffered under that same interest rate sort of democlese, that ises the possible impending problem of higher interest rates hampering financial stocks on the week. finally, energy stocks were lower, too, as crude oil fell 3.25%, still finishing over $36 a barrel, high by historical standards. stocks like apache lost over 5% on the week. for the week, the single best performing stock in the s&p 500 was motorola shares up 23% after the company reported on wednesday that last quarter’s operating earnings were 19 cents a share, more than double the seven cents that had been expected. the worst-performing stock in the s&p 500 for the week, affiliated consumer services is, also known affectionately as the world’s largest processor of student loan payments down over 9%. shares of this dallas company fell on both earnings and revenue figures from last quarter that came in below analyst estimates. and that’s it. matt, back to you in the studio.
>> a fine job. bob bowdon, thanks have. gains helped lift the nasdaq by .8%. the software giant alone accounted for more than half of the nasdaq 100’s rise today and also nearly 15% of the total nasdaq’s daily traded volume. julie hyman has details from the nasdaq market site.
>> microsoft helped the nasdaq to a gain not only today, but also for the week. the nasdaq up about 2.5% on the week and we’ll get to more details on microsoft in just a second. let’s look at the stats for the week. computer group up 4.5%. a little more than that, actually. bioteches also up 2.5%. the financials still performing poorly on concern about interest rates. also, the individual names that did the best this week. as you might expect, some of the companys that came out with better than estimated earnings or with forecasts. companies like microchip technology, fiserv, ebay and tellabs were some of the best performers on the nasdaq 100 indirection. let’s get to microsoft. this is really the big story of the day. it accounted for a lot of the nasdaq’s gain. the company said third quarter sales rose 17%, that was more than the company had estimated. also, it looked like analysts were focusing on two parts of the stock generally. one of them is that license revenue has been strong and that’s something that’s an ongoing source of revenue. one analyst says that that allows them room for more growth, leverage the year continues. something else that a lot of analysts were talking about today is the fact that the stock is attractively valued at these levels. we saw a gain in those shares today. going in the other direction, we had amazon.com and shares of other internet companies like yahoo and ebay falling today after the company came out with a second quarter sales forecast that did disappoint some investors. also downgraded over at piper jaffray. the analyst there talk about disappointing gross margin performance and revenue growth declining and the forecast for revenue growth declining and he also said the valuation residence mains one of the richest in the internet sector. so, amazon declining more than 5% today. back over to you.
>> all right. well, we have just passed the midway point of the current earnings season, if you weren’t paying attention. well, so far, a records number of companies in the s&p index have reported better than expected profits. bloomberg’s su keenan has the score card.
>> and there will be a quiz at the end, matt.
>> i’m ready.
>> let’s take a look. profit growth for companies in the standard & poors 500 index beat average analyst estimates by 9.8%. that’s a record. it’s the most since thomson financial began tracking them in 1994 and more than doubled the average of 3%. now of the 250 companies already reporting earnings, again we said half are out as of this week, 192 of them, another record at 78%, exceeded analyst forecasts. it’s well above the average of 58% for the past decade. now these results showed the continuation of the larger trend. in the past year, two thirds of the s&p 500 companies reported earnings that exceeded quarterly estimates. motorola, eastman kodak, and general motors were among the roughly one third of s&p companys that reported earnings this week and they reported an average increase of 26%. that’s an earnings increase of 1% compared with this time last year. sandy lincoln is c.e.o. of wayne hummer asset management, and says many investors are aware that corporate america is boosting profit by cutting costs. he says this places greater focus on revenue growth and he see this is quarter’s growth as strong.
>> it looks like the quarter so far is in the 12% to 14% range, an incredibly high number. if you look historically over long economic cycles, 4, 5, 6, 7% is a much more common revenue number. we’re about two to three times the normal number here. it’s a very strong-looking quarter right now.
>> analysts and investors say this kind of revenue growth has to continue to sustain a rally in stocks. james shier manages more than $1 billion for security benefit group and he says, quote, you needs to have exceptional earnings growth or very gradual lift of interest rates for stocks to continue to do well.
>> all right, su, thanks very much. more after the break.
