Walmart --- Brett (slow)
>> welcome back. on january 31, officials at the federal reserve saw an economy expanding at a solid pace, creating the threat of inflation justifying another quarter of a point increase in the nation’s benchmark interest rate. at the meeting, fed officials agreed that although recent economic data had been uneven, the economy seemed to be expanding at a solid pace. employment was rising at a fairly good pace and compensation rising moderately. that raised concerns about material and labor shortages. that, coupled with rising energy prices, had the po ten torble add to inflation pressure. and so, even though the nation’s benchmark interest rate seen close to where it needed to be given the current outlook, some further policy firming might be needed to keep inflation pressures contained and the risk to price, stability, and sustainable economic growth roughly in balance. the possibility of additional rate increases the minutes say reenforce by readings on core inflation and inflation expectations that were somewhat higher than what was desirable over the long run. the fed officials went on to say in a warning to investors perhaps that rates will depend increasingly on economic developments and could no longer be prejudiced with the previous degree of confidence. the minutes also note that the members of the open market committee took the opportunity individually and collectively to pay tribute to alan greenspan’s many years of outstanding service to the federal reserve and to the nation. let’s check the situation in treasuries today. we received fresh evidence today the u.s. economy is picking up after a fourth quarter slowdown. the index of leading economic indicators rose 1.1% in january, which was above forecast, and the fourth straight monthly gain. it’s also the biggest increase since june. the l.e.i.’s forward-looking data that tracks the economy three to six months down the road. two of the largest big-box retailers reported earnings earlier today. wal-mart says fourth-quarter profit rose 13% on solid holiday sales, and home depot meantime reported a 23% jump in profit. for details, let’s bring in garegare. • brett gering.
>> wal-mart, the world’s largest retailer, sold more clothing, longs and gift cards during the holiday season. it limited markdowns and promoted christmas sales as early as november 1 to get a jump on the competition. revenue tops $90 billion in the quarter, a record. for fiscal 2007 which began at the beginning of the month, wal-mart had less exciting news to share. higher interest expenses may crimp earnings this year by as much as eight cents a share.
>> it’s a little early to put new money into the stock. they are doing a lot of wonderful things. i’ve been very impressed with a lot of strides they’ve made. but i think it’s going to be a bumpy road for them over the next four or five quarters, at least.
>> first-quarter profit will amount to between 58 and 62 cents a share, according to the company. sales of refrigerators, wash mag sheens and kitchen cabinets helped home depot record its biggest profit gain in two years. net income at the retailer climbed to $1.29 billion or 60 cents a share. that exceeded analyst estimates. comparable store sales gained 5.5%. the real growth driver was c.e.o.’s robert nardelli’s push to boost the services business that sells building supplies to professionals and helps homeowners with installing everything from counter tops to roofs to air conditioning systems.
>> we think this business offers significant growth over the next several years as they basically do what they’ve done in the d.y.i. market . i think that offers significant earnings and top-line growth as we look out over the next several years. it will be a combination of both acquisitions as well as organic growth.
>> speaking of acquisitions, home depot many made more than a does en in the past 12 months include the $3.2 billion purchase of hughes supply in january.
>> brett, thank you. radioshack will pay david edmondson a little over $1 million in semps. edmondson resigned monday morning five days after admitting he lied about his education. he signed an 18-month noncompete agreement. they promoted claire burrbrowki to president. during edmondson’s tenure, the stock fell 25%. blackstone group will acquire merry star. it is the buyout firm’s fifth hotel takeover in the last year. blackstone will pay $10.45 a share for the company, a 5% premium to the closing price friday. meristar owns hotels in 19 states under the brand names ritz carlton and westin. we’re going to continue our coverage of the latest financial news on bloomberg “after the bell” in a moment. stay with us.
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Listen Market briefing --- Lori (slow)
The deal --- Peter (slow)
NYSE --- Julie (slow)
Nasdaq --- Robert (slow)
maker. they make the defibrillators. those numbers should be out any minute now. we’re also tonight going to get reaction to the release of the fed minutes from the january 31 meeting with william gross, the chief investment officer of pimco. and kathleen hayes will speak with mr. gross at 39 minutes past the hour. right now, though, there are your settling numbers for this tuesday, the first trading session of the shortened week. the dow down 47 points, led lower by hewlett-packard, honeywell, general motors, wal-mart, wal-mart of course out with an earnings forecast falling short of what analysts were forecasting. s&p 500 drops four points today, 12 82 the close there. the nasdaq composite index down 19 points, 2262 along with computers. we also saw weakness in semiconductor software, as well as some of the pharmaceutical names today. moving on tonight, though. president bush defending the administration’s approval of a deal allowing the sale of a company that operates six u.s. ports to affirm control by the you nated arab emirates. lawmakers from both parties are questioning the deal, and bloomberg’s peter cook is in our washington bureau with the very latest. peter.
>> well, lori, president bush making those comments this afternoon aboard air force one saying the deal has been extensively reviewed saying, quote, we believe this is a legitimate deal that will not jeopardize the security of the country and at the same time send out a signal that we’re willing to treat people fairly. this is president bush right here returning from his trip out west at the white house. and this is apparently taking place right about now, at least this taping played back. now, the president went on to say he would veto any legislation standing in the way of the transaction. let’s hear what he had to say at the white house.
>> -- talking about our need to change how we use energy. very encouraged by the technology that i saw and inspired by the scientists and engineers that are working on these new technologies. i also want to address another issue i just talked to the press about on air force one, an that is this issue of a company of the u.a.e. purchasing the right to manage some ports in the united states from a british company. first of all, that is private transaction, but according to law, the government’s required to make sure this transaction does not in any way jeopardize the security of the country. so, people who are response nble our government have reviewed this transaction. the transaction should go forward, in my judgment. if there was any chance that this transaction would jeopardize the security of the united states, it would not go forward. the company has been cooperate wive the united states government. the company will not manage port security. the security of our ports will continue to be managed by the coast guard and the customs. the company is from a country that has been cooperative in the war on terror. an ally in the war on terror. the company operates ports in different countries around the world, ports from which cargo has been sent to the united states on a regular basis. i think it sends a terrible signal to friends around the world that it’s ok for a company from one country to manage the port but ot a country that plays by the rules and has got a good track record from another part of the world can’t manage the port. and so, look, i can understand why some in congress have raised questions about whether or not our country will be less secure as a result of this transaction, but they need to know that our government has looked at this issue and looked at it carefully. again, i repeat, it’s―if there was any question as to whether or not this country would be less safe as a result of the transaction, it would wouldn’t go forward. i also want to repeat something again, and that is this is a company that has played by the rules, that has been cooperative with the united states, from a country that’s an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through. i want to thank you for your interest in this subject. thank you.
>> and will’s president bush speaking outside the white house this afternoon on this deal. again, a deal approved by the bush administration that would allow a company controlled by the united arab emirates to gain control of operations at six u.s. ports. the president making clear he feels this is a transthat should go through, defending his administration’s review of this deal, that it does not pose any threat to the security of the united states in his words. it will be interesting to see how lawmakers from both parties react to the president’s words, because throughout the course of the day we’ve been hearing from democrats and republicans, including senate majority leader bill frist who worried this deal might pose potential security concerns. he announced earlier he would seek to delay the sale of this transaction, a steam navigation company purchased by d.p.y. we just heard from president bush it’s a deal he would like to see go through. back to you in new york. much more on this story later today.
>> peter, thank you very much for that. new jersey governor jon corzine says the state will sue in state and federal court in an effort to stop the sale of port operations. pete ler speak with governor corzine at 15:01 new york time tonight. now we have after the bell earnings knews for medtronic. medtronic coming in in line, 55 cents a share in their third quarter. that is an increase of 9%. actually, the increase is a 9% rise in revenue. however, the revenue number did fall short of thomson financial estimates. $2.77 billion versus the $2.9 billion estimate for medtronic. medtronic is breaking down into their different units, so a lot of numbers here basically their cardiac rhythm management came in with $1.26 billion in the third quarter, their vascular businesses, the stents, rose 6% to $236 million. i.c.d.’s up 21%. cardiac surgery revenue fell to $1544 million. some more background on the country. they did continue selling flawed cardiac defibrillators for two years according to documents filed in a california lawsuit after learning some of these may suddenly quit working and reported through company recalled the devices last year, 19,000 people had to have surgery for a replacement. we want to get you up to speed now on what was behinds some of the drivers today. we had losses across the board. bloomberg’s julie hyman is standing by to give us a little background on today’s trading session. julie.
>> thanks, lori. we did finish lower across the board, about 1.5 billion shares trading hands today. it looks like the investors in the market are listening to the fed. the fed has told us, and it was reenforced in the minutes today released from the january 31 meeting, that now what their decisions are going to be going forward are data fen dent. that means they’ll be placing a lot of credence many the various economic reports that come out. that’s evidenced today by leading economic indicators came out and beat expectations this morning. it’s not a number that usually moves the market . but because the fed will be paying attention to numbers like this, the market is too. because of that that stronger than estimated number today, interest rate concerns were renewed and stocks went lower. the groups that did the worst today, technology and consumer related were the two biggest today. for more on tech, we go to robert at the nasdaq.
>> julie, thanks. traders telling me inflationary concerns of the fed minutes reenforcing that as you mentioned interest rates are likely to continue moving higher. this is a holiday shortened week so not all the players in place today, 1.7 billion shares, below the average. investors were selling technology, buying energy, according to the head of u.s. trading at u.b.s. one of the reasons they were selling technology and semiconductors in particular, the sox moving lower today, citigroup lowering their weighting on semiconductor and semi equipment stakes from a market weight to an overweight saying growth could drive down chip pricing. they removed applied materials from their recommended list. those shares falling as well. you heard president bush talking about his trip out west continue farg second day, talking about alternative energy plays. we saw evergreen solar rising, today, up 5%, one of many alternative plays on nasdaq rising. they did win a $100 million contract to supply modules in the next four years to s.a.g. solarstrom. we saw bronco drilling up 10% after its earnings and revenue topped analyst estimates this morning rising on the session as well. and that’s all the time we have right now. lori, back to you in the studio.
>> thank you, robert. early advertising during the holiday season paid off for wal-mart. the world’s largest retailer took in $90 billion in revenue during the fourth quarter. we’ll bring in bloomberg’s gehring gehring for―brett gering next.
