Market briefing --- Suzy (fast)
NYSE --- Julie (slow)
Nasdaq --- Robert (slow)
NYMEX --- Suzy (fast)
>> this is “on the markets .” i’m suzy assaad. our top stories this morning, inflation concerns have commodity prices dropping today. copper was down as much as 9%, its biggest drop in a year and a half. zinc, silver, gold, oil are all lower as well. and foreign investors closed their purchases of u.s. securities in march. central banks in other countries were net sellers of treasury notes for first time in six months. and target, their margins fell in the last quarter, while the net income matched expectations. as for the overall markets , let’s show you what’s going on. the dow is unchanged. the nasdaq composite is off by eight points. the rest of the markets , treasuries this morning, the treasury is at 5.17. as we were told a little while ago, you’re seeing a lot of selling, anything that’s risky, be it commodities, people are unwinding out of it today. looks like they’re going into the treasuries. the foreign exchange markets also are seeing a pickup going on for the dollar. the dollar yen, euro is at 1.28 and a third. the british pound is sinking this morning. as for the metals, gold down 2.6%, as you’re seeing in the futures markets . silver 7% lower. platinum down by 3% that’s just the tip of the iceberg to some of the other commodities that are moving around this morning as well. let’s send you down the our market reporters for more on today’s session. we have robert gray at the has dack and julie down at the new york stock exchange.
>> thanks, suzy. let’s talk about the falling and the effect they’re having on the futures. keep in mind that if you look at the s&p 500 energy index and the basic materials index, which includes many of the metals producer, you’re only talking about 13% or so of the s&p 500. so the weight is not something to disregard between the two, but it’s not the largest by far in the s&p 500 that distinction goes to the financials. but when you see the groups decline it can have an effect on the overall market . i want to talk about some of the oil related stocks. am ex, it was trading at a record, but then it’s declined over the past three sessions and it’s down 6% over the past week. many of the individual stocks also were trading at a record, and they’re now trading off significantly. again, over the past three sessions we have seen declines from stocks like weather ford international as just one example. so you can look at the energy stocks as part of the story here. even though they’re still the best performers for the year to date, and then the other part of the story is the metal stocks as well. i mentioned many are listed here. part of the s&p 500. when you’re talking about many of the gold miners, they’re not listed here, and there are many of the foreign stocks that are listed in the u.s. so a lot of us expect here, even if you’re not looking directly at the s&p, you can see many of the gold miners that are falling off today. suzy was talking of the metal prices themselves and it should be noted that they are not now, many of them at the lows of the session. we haven’t seen sort of an extension of the decline. but it looks like some investors are coming back in and perhaps doing a little bit of purchasing as we see these metal prices drop off sharply. now we send it to robert at the nasdaq. he has the stories of the day.
>> thanks. we are looking at a stock moving higher in a down market day in the biotech. moving higher, the $2 billion market cap company, stock is down 13% year to date, but you see it climbing in today’s session. it sells for 69 times estimated earnings though. in march they ended up―they had a multiple two study that did not work. today they’re waiting on a sleep disorder treatment and that’s expected some time today, if they get outright f.d.a. approval, that would be the best-case scenario. the majority of them, the f.d.a. could issue them an approval letter that means they have labelling issues that they need to work out. worst-case scenarios that it’s denied or they ask for more studies and that could send the stock plunging. it’s a small market as far as the number of players involved. a couple of other players including aventis. one of them a french company, s.m.y. is the trade here, more diversified company with several drugs. they have treatments for breast cancer and colorectal cancer. the a.d.r.’s are up this year some 9%. they are one of the competitors. the other competitor is sepracor. little changed awaiting that decision in today’s session. of course, as i mentioned there, more dependent on that sleep deprivation or sleep disorder drug. so they would be more adversely affected according to analysts should their rival neurocareen be given the green light. back to you.
>> robert, thank you. as for a check on the energy markets , here’s what crude oil futures are doing at this hour. we are seeing them coming down by 2%. su keenan is joining us from the new york mercantile exchange.
>> spirited trading behind me, although we do appear to be off the lows of the session. we began the morning 3 to 3.5% lower across the board. gas, heating oil, natural gas. we are down an average of 2.5%. the reports, late last week, the international energy agency cutting its demand forecast for this year. china said its imports for april were flat year over year. the month to month, a huge jump and even a german industry group, seeing diesel use in europe had been lower. citigroup and other analysts are saying that oil may have peaked. the director of economic strategy, at hunterton global investments and he said now is the time to get out of the markets . take a look though at where crude has moved for the past week to get a good idea of the range. we actually began last week very close to where we are now. in fact, we fell to 6825 last monday and able to rebound. 6920 to 6980, it has been strong. we rebounded. don’t count the bulls out yet. back to the you, suzy.
>> thank you very much. coming up next, today is the deadline for seniors to enroll in the new drug medicare program. but will the deadline date will rescinded?
>> the chair is recognized.
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Listen Focus: Medicare
>> the supreme court is siding with ebay. the justices say that the company is found to have infringed patents should not always be made to change their products. it set aside a ruling that would have barred ebay from using patented technology owning by merck exchange which is a virginia company.
>> in the meantime, we have got the senate that resumes debate today on immigration reform and some say very big u.s. companies are watching this very closely. here with a little bit more on the story is ellen braitman.
>> indeed, they are. including technology companies like microsoft and intel are pressing congress to welcome more skilled immigrants to the u.s. the congress―the senate resumes debate on a broad overhaul of immigration legislation, some companies are warning they will move jobs overseas if congress does not act. the legislation includes a proposal to raise the cap on the so-called h-1-b visas. these are for skilled workers by 75% and the proposed laws would make it easier for them to gain permanent residency. the lobbying efforts have been publicly overshadowed by the heated debate over unskilled, illegal workers.
>> the demonstrademonstration, etc., are about illegal immigration, and while the topic of legal immigration gets pushed to the sidelin sidelines. we are seeing that these people are the people that can help drive our economy. if they come to school here, if they’re well educated, they can contribute to our economy. let’s make the u.s. the place where they want to come by choice.
>> president bush has called on congress to raise the cap on skilled immigrant visas, but will call for thousands of national garden troops to be deployed along the mexican border. in the meantime, lawmakers favor enforcing current laws and tightening border security before creating new ways for new immigrants to enter the country. the president will address the nation at 8:00 washington time and bloomberg television will carry his remarks live. suzy, back over to you.
>> thank you very much. in the meantime, today’s also the deadline for seniors to enroll in the new medicare drug plan. but there are worries about whether this day has come too soon. lindsay arent has more.
>> there are six million seniors in the u.s. not covered by a prescription drug plan and they can face an enrollment fee if they choose to enroll in the medicare after today.
>> deadlines are healthy.
>> president bush has been pushing seniors to enroll by today, but democrats asked for the deadline to be extended and for the late fees to be eliminated. they say the insurance industry has a stake in enrolling seniors sooner rather than later.
>> who do you think does not want to extend the deadline? the insurance companies who want to make you join now.
>> the bush administration disputes that notion.
>> you know, it’s actually not a benefit to the insurance companies. it’s fairness thing with those who signed up. those who haven’t signed up would not be paying their share by comparison to those who had.
>> no question, insurance companies have benefited by the deadline which encouraged seniors to enroll early in order to avoid a penalty. unitedhealth care has been the most successful. followed by humana and well point. but analysts say it’s 2.5% of industry earnings this year.
>> the financial benefit from this program is not all that significant for most of the plans. even united which is going to enroll the most amount of members this year, you know it’s only adding 7% to their e.p.s.
>> drug and insurance companies stand to gain from this program, but seniors stand to lose.
>> everyone knows the profits that the insurance companies are making. so if in fact they want the american people to believe they’re doing this out of the goodness of their heart and not a great benefit for them or program for them, then they’re crazy.
>> in washington, lindsey arent, bloomberg news.
>> let’s talk more about the issues and others. with us here is congressman clay shaw of florida. congressman, welcome to the program. thank you for coming to the offices today. let’s start talking about this deadline which is looming. it’s going to happen later tonight. what are the chances that it will get extended?
>> i think it’s a good chance. but it’s not something that seniors should count on. congress has not extended the deadline because they don’t want people to go ahead and continue to procrastinate and not sign up for the program. or look at the program and see if it’s the right thing for them. after the deadline comes and goes which is midnight tonight, congress will decide whether we should extend it or no but again i want to emphasize don’t count on congress extending it because it may not happen. and everyone has until midnight tonight to call 1800-medicare to check in and see if this is a good program for them. i’d like for the viewers to understand that they should have their medicare card and their prescriptions with them, when they call in so that they can go through and figure out which plan is best for them. i have heard that a lot of people are confused by the number of choices that they have. ate like going into―it’s like going into a huge ice cream store and trying to figure out what you want. but you can be walked through the program and according to the drugs you take, one plan may be better than the other or the amount of drugs that you take. so it’s been a little complicated, but, you know f you will go back and look at the editorials that were written when medicare first came on line, they all said it was too complicated also.
>> but it just seems maybe fair to give people―it seems to be complicated enough that people may need more time to investigate it more and find out what’s best for them or not.
>> well, the low-income people, the administration has already extended that until november. so they have plenty of time to look at it. it’s the middle and upper income people that the deadline is going to apply. at midnight tonight.
>> congressman, the other thing that’s happening tonight is of course the president’s speech. he’s expected to talk about immigration. what do you expect him to say?
>> well, i expect him to say that we need to start having better enforcement at the border. i think he’ll get the military involved. most likely with the national guard. the house of representatives --
>> when you say get the military involved, will there be troops that are stationed on the borders? will we see troop deployment?
>> they will be backing up the border patrol that we have along the southwestern border of the united states. now, this doesn’t apply to my state of florida where we have a lot of the illegal immigration coming in by sea. it’s along the mexican border that i believe he will be speaking to. but we have problems with all our borders that we have to address. i think the president also will be talking about a guest worker program. i’m concerned that we really haven’t planned this out thoroughly enough to really implement one at this time. i think the congress and the administration need to work together to get some of the details. how many of these guest worker passes are we going to give out? if you give them to everybody, you might as well forget about security along the border because you wouldn’t need it. but what we need is some orderly way in which we have thought this through and not just to rely upon the regulations that some bureaucrats will at some point write in order to create―in order to explain the congressional action.
>> the president though is going to talk―he has a tough thing to do because he’s got dissidents in his own party, people in his own party who are not too impressed with the plans going forward, with regard to immigration. obviously from the other side of the aisle as well. is the deployment of the national guard sufficient to at least get his republican base behind him on this?
>> we need to go forward with building a wall to have more permanent security. it’s about a 2,000 mile border in which 700 has been voted on by the house of representatives to put a wall across. we should go forward with that. but one of the biggest controversies within our own party, with regard to illegal immigration is the path to citizenship. i don’t see where the guest worker program really has to address that issue. i think the people here on a guest worker program are here because it improves their quality of life. they’re hired here because their labor is needed and it has nothing to do with citizenship. if somebody wants to be in the the guest worker program and apply for citizenship or a green card back home, they can still do that. and i don’t think that we ought to shorten or in any way expedite the path to citizenship, particularly for those who are already here that came here illegally. i don’t think we should do it because someone has been here four or five years illegally avoiding our laws. i don’t see how that conduct should be rewarded.
>> three or six months from now, what is our immigration policy likely to look like?
>> well, that’s a good question. i think we will have the border patrol in place. i think we’ll have a wall under construction. and all of the legal labor, i might say. and i think we will be probably still negotiating how the guest worker program is going to work. i was in congress back in the ‘80’s when we passed the simpson-mazoli bill that was supposed to give amnesty to a few illegals, and at the same time, was going to put in employer sanctions penalizing employers for hiring illegals. we put in place a lot of thought with regard to this. obviously, it hasn’t worked. and the mistakes that were made there, i hope we don’t make again. i hope we really strength this thing and have a guest worker program that will work where we have accountability for those in the country. we have limitations on how how long they can stay. it’s a tough question. we’re dealing with human beings.
>> human beings and families and much more.
>> absolutely.
>> congressman, thank you for being with us this morning. of course thanks to clay shaw of florida. we take a quick break, everybody. we’ll be right back because we’re going to be talking about gold next.
