Market briefing --- Bob (fast)
Hurricane Ivan --- Su (fast)
NYSE --- Julie (slow)
welcome to "world financial report." i'm bob bowden. crude oil prices rose and natural gas soared in new york on the approach of hurricane ivan. checking oil prices right now, we see $43.87 a barrel. that's up 2.5% on the day, or $1.06. moving on, among the other energy movers, include unleaded gasoline there, up 3% -- the growing threat from% l hurricane ivan is where we turn to now p.oil and natural gas companies are shutting down oil platforms in the gulf of mexico and evacuating workers. su keenan takes a closer look at investor concerns that the storm will disrupt production, refining and possibly the arrival of shipments.
>> as we've been hosgating, a quarter of the nation's oil and natural gas production comes from the gulf of mexico. by all accounts, concern about potential damage is real. ivan is already responsible for 60 deaths across the caribbean, sweeping through grenada and jamaica over the weekend. with maximum winds close to 160 miles per hour, it qualifies as one of the strongest storms on record. fema's michael says the storm is moving westward.
>> we are preposgating right now equipment, manpower, supplies, throughout the atlanta region into alabama, also. the national hurricane center tells us this storm could hit anywhere, frankly, from louisiana all the way over to the florida panhandle so we're getting ready in all of those areas.
>> and so are the oil companies. evacuations on the gulf's oil platforms have already begun. royal dutch-shell planned to complete removal of workers today, idling 272,000 barrels of daily owl output and 880 million cubic feet of natural gas production opinion the louisiana offshore oil terminal said today it was stopping off-loading tankers. british petroleum, exxon-mobil and anadarko have evacuated non-essential workers over the weekend. anadarko says it is difficult to predict the impact on pricing.
>> i think when you start talking about priceing, certainly the gulf provides a big part of the production for the u.s., 25% of the production. so how much impact it has on prices is a function of how many platforms are impacted in the gulf of mexico. when frances came through, about, i think, 3% of the gulf of mexico was shut in. so the impact hasn't been minimal but has upward pressure.
>> meanwhile, shares of several oil and gas companies rallied to new highs. exxon-mobil stock closed at an all-time record high. reskco's marshall steve says the uncertainty of the impact rather than serious supply concerns drove today's speculative trading.
>> we've rebuilt to historically normal levels and there isn't the severe tightness that $45 oil might suggest. it's the fear of potential disruptions.
>> let's talk about the potential. ivan predicted to hit the mainland u.s. on thursday and planalytics analyst and meteorologist paul walsh says there are still 90 days left in the storm season.
>> obviously it's a very, very active season. there are additional disturbances out that the weather service is looking at. in fact, there could be another drod identified within the next 24 hours. too early to say.
>> another factor driving oil higher is wednesday. some analysts say opec is pumping so much oil now, it doesn't have the capacity to increase.
>> appreciate that. moving on, time warner withdrew its bid for metro-goldwyn-mayer after it could not reach an agreement on price. the decision may clear the way for sony to take control of m.g.m.'s library of more than 4,000 movies. the purchase would double the size of sony's film library and help the company boost d.v.d. d.v.d. sales. sony raised the offer by 75 cents a share to $12. this is the third time owner kirk kerkorian has sold the studio. the treasury department said today august's budget deficit was $31.1 billion, down from $76.6 billion in august of last year. through the first 11 months of the fiscal year, the deficit was $436.9 billion, through the first 11 months. $436.9, compared to $374 for all of last year. u.s. treasury notes rose after federal governor susan bys says there is no urgency to boost interest rates until there are more signs of steady economic growth. and the treasuries -- the dow essentially unchanged on the day. for more on todayr's trading action, we bring in julie hyman at the big board.
>> stocks pared gains towards the end of the session. the dow and s&p managing to finish the day higher. the dow, just slightly. concerns in the market that have been in the market concern earnings in the third and fourth quarter, expected to be slowing. this is reflected in comments we had today was edward keon, new chief investment strategist at prudential securities. he is replacing ed yardeni. he gave out his asset allocations and recommends that investors hold 55% stocks, 40% bonds and 5% cash. he said the fairly low stock allocation is because he expects earnings to slow down perhaps more quickly than the market anticipates. we did see semiconductors rallying today, extending gains we had last week. we want to note these are the worst performers for the year to date. that group is down 30% and have been rebounding in the past couple of weeks as investors have been looking for bargains. national semiconductor in particular doing well today after it was upgraded at sanford c. bernstien. walking-talking about the impact of hurricane ivan approaching the gulf of mexico. insurers rising today as it approaches. we have seen insurers do well in the past in advance of hurricanes as analysts estimate they will raise premiums. other stocks active today on that news, an apartment management company falling in today's session. that's after the company said that funds from operations in the third quarter will be cut by five cents due to hurricane frances, not even accounting for the damage from hurricane ivan. also talking about campbell's soup saying fourth-quarter earnings fell 20% because of restructuring charges and higher costs. i'm julie hyman, bloomberg news, at the new york stock exchange.
>> thank you, julie hyman. companies' profit forecasts are falling short of estimates at the highest rate in three years. lower estimates from companies including alcoa and coca-cola enterprises may be a sign that earnings expectations are too high. still, analysts have yet to cut their profit estimates. they expect that third-quarter earnings will increase 14.8% according to the last surveys from thomson financial and that is unchanged from a month ago. for some perspective on earnings expectations and the gulf between performance and recommendations, we turn to stocks editor matt nesto with more.
>> check it out, if you look at the estimated earnings per share for the s&p, the actual earnings for the s&p 500, 10 years' worth, you'll notice there is a gulf between the two which says typically that estimates historically have vastly exceeded actual results. what stands out in this chart is the fact that when the going got tough, the analysts really missed it. i'm out of time. back to you.
>> well, brevity is the soul of wit. thank you. we'll hear from pimco's chief investment officer, bill gross, when we come back.
