Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Wal-mart --- Su (fast)
>> welcome to “world financial report.” i’m bob bowdon. oil prices fell today off a record high on friday intraday after iraq boosted shipments to tankers to normal rates for the first time in two weeks. on the day, we saw crude oil closing at $46.07 a barrel, up just two cents on the day. futures also fell on concern that current oil prices will hurt demand. this month alone, prices have hit record highs 14 of the past 15 trading sessions. ed silliere, vice president of risk management at energy merchant in new york says speculators are not the only ones driving oil prices higher.
>> weave had a real surge in new players in this business, and that’s coming from the stock side. those who are the big portfolio managers who are concerned about stock prices going lower due to high i’m prices have come in and started hedging in the oil market .
>> supply concerns have helped fuel the rise, especially in iraq. fighting in the southern region has kept the lid on some exports there. meanwhile, russia’s biggest oil company cut its production target for the year. yukos now expects output at just 1.7 million barrels of crude a day, down from 1.8 million. yukos says the company’s tax bill is forcing it to spend less on drilling and maintaining wells. among the other energy movers of the day, gasoline, new york unleaded gasoline, up see there, down just .08%, you see there $125 a gallon. heating up up fractionally, as was natural gas futures. u.s. energy expense spencer abraham will meet with the head of the international energy agency in paris tomorrow at 10:00 a.m. paris time, 4:00 a.m. new york time, to discuss prices. the i.e.a. advised 26 oil-consuming companies and coordinates the use of government oil reserves to avert shortages. the bush administration policy is not to tap into the u.s. strategic oil reserves to lower prices. el paso says it will record $3.7 billion in pretax costs. that’s as it restates results dating all the way back to 1999 to correct improper booking of oil and natural gas reserves and also accounting errors. the nation’s largest pipeline company already signaled the restatements, which include $2.7 billion for a cut to el paso’s oil and natural gas reserves. the company is reviewing its accounting for past periods before publishing the belated 2003 results. they are asked―they are slated for the he happened of september. well, let’s get to the closing numbers on this monday afternoon. the dow jones industrial average finished lower to the tune of 37 points, or about .4%. you see there, finishing at 10,073. s&p 500 down a quarter of 1% at 1095. and the nasdaq was essentially unchanged on the day. the big board came in at 1.2 billion shares traded, as we indicated, the weakest trading day so far this year. you see decliners beating advancers by close to a 2-1 margin. over at the nasdaq, volume at 1.23 billion shares we’ll call it with decliners outpacing advancers, but not quite by the ratio we saw at the big board. checking other major market averages, we see red arrows across the board. the nyse composite down half a percent, amex composite also down half a percent, and the russell 2000, a measure of small cap stocks, down .8%. the broadest look at the u.s. markets is seen with that chart. the dow jones wilshire 5000 down about 1/3 of 1% on the day. treasuries decline as a decline in oil prices reduce speculation economic growth will slow. we saw treasuries, the 10-year, trade off 13/32 on the day, yield up to 4.28%. and the five-year down 7/32. checking the two-year treasury, that was down just 2/32 on the day, yield up to 2.47%. well, trading volume at the new york stock exchange, as we just indicated, amounted to just over a billion shares. that’s well below the average for the year. for more on today’s trading action, we bring in julie hyman at the big board.
>> lowest trading volume of the year today on the new york stock exchange, and traders are telling me that it might get worse as the week goes on as a lot of investors are on vacation, and also as people get out of town ahead of the republican national convention. that said, however, we did have a declining market today, mixed for much of the session, then really extending declines as we got toward the close. energy stocks helping lead the decline today, as we saw the price of oil come down off its highs. some of the biggest losers within that group, apache, as well as burlington republican sources. on the other hand, however, reflecting the mix the market that we saw for much of the day, semiconductors did well in today’s session, extending some of the advance that they had experienced last week. so some of the biggest gainers there, l.s.i. logic, broadcom, advanceded microdevices, as well as nvidia. some of the other groups, employment services. robert hath international was downgraded over at u.b.s. the analyst said this company had experienced a boost in consulting business related to the sarbanes-oxley act and more financial regulation. they said that that business is now falling off. man power, kelly services, con ferry international, and labor ready. also moving on an analyst, e.d.s. was raised over at sanford bernstein. the analyst said there was concern among investors that the company had some trouble signing navy contracts. they said now the company’s getting over that hurdle, and those shares also rising in today’s session today, along with other information technology stocks. back over to you.
>> thank you, julie hyman. well, more details now on the biggest drag on the broader market , shares of wal-mart, the a time when retailers are counting on back to school sales to boost earnings, the world’s biggest discount chain says that august sales were weaker than expected. and bloomberg’s su keenan joins me now with more on the wal-mart storyment
>> as you know, wall mart a benchmark for the retailers, so a lot of attention being paid here. wal-mart now cutting its august sales forecasts and giving two key reasons. it says sales were hurt by hurricane charley and, more importantly for the retailing sector, demand for back to school products, it says, has been sluggish. the company says the hurricane forced 75 stores to close temporarily and hurt sales at 200 locations in florida. the world’s largest discounter also said school-related items, note books and jeans, were selling less than expected, this at a time of higher gasoline prices and slow job growth. analysts say wal-mart sales are sensitive to both because a large percentage of its customers include or are low-income families. wal-mart says august sales will be unchanged, 2% higher, a change from the previous forecast for a gain of as much as 4% and it would represent the smallest gain in 17 months. wal-mart shares initially fell as much as 2.5% on the news before regaining some of that lost by the close. morgan keegan’s john lauren says when the number one retailer says demand isn’t there, he expects demand to pick up soon.
>> how much does gas prices have to do with it, it’s tough to tell. but the key is let’s watch and see the numbers after labor day and get those sales trends a couple of weeks into september. the calendar is a little going against this year, labor day being a shift, shifting out a little bit, but once again, consumers are not buying until it’s really time of need.
>> and lawrence says the time for wal-mart is in the next three months. that’s when it needs to see demand pick up. an analyst at rockefeller & company, whose $4 billion in assets include wal-mart shares, he says, “your average american consumer is not as robust as wal-mart thought they would be two months ago.” now, among the traditional back to school products that wal-mart says is still selling, uniforms and athletic shoes. the company also says in addition to the later than usual labor day, there are fewer clearance items and the absence of child care credit checks boosted sales last year. all this is making a difference. kohl’s fell more than 1%. shares of target initially as much as 2.5% lower before rebounding in afternoon trading. costco shares fell 1.3%, and they are up 13% year to date. that’s the wrap on the retail end. bob?
>> thank you, su keenan. appreciate that report. well, shares of fedex soared on the day. there’s one stock that rallied. that’s after the nation’s second biggest package carrier raised its 2005 profit forecast for a second time, saying it will boost capital spending by about 1/3 as shipping demand surges. the company does not expect rising oil prices to cut into demand. fedex and u.p.s. both pass on higher fuel costs with surcharges. fedex increased the forecast to between $4.40 and $4.60 a share for the fiscal year ending may. it also expects to earn $1.to $1.10 in the share in the first quarter, more than double from a year ago. fedex also said it will increase investment in equipment and facility to as much as $2 billion, a 31% increase from the company’s original investment plan. when we come back―rising energy costs may slow global growth. we’ll get a forecast from the chief economist of the american petroleum institute. that comes up right after a commercial break. stay with us.
