Market Briefing---Lane (medium)
Consumer confidence--Carmen (fast)
NYSE---Deb (fast)
>> we welcome you once again to world financial report. i’m lane bajardi in new york. consumer confidence was higher than expected in june, driven by optimism of the company’s prospects six months from now. now economists had expected the index to drop to 82. it fell the second month in a row when the iraq war began. carmen roberts joins us now with the story behind these numbers.
>> working in the economy’s favor are the lowest interest rates for a decade. four months of rising stock prices and $330 billion in tack cuts starting in july. now, economists say those factors exceed so-called expectations to the highest level in september.
>> the latest gains by the equity market perhaps have convinced consumers that things will get better later in the year. and consumers are al well aware of this latest drop by borrowing, mortgage yields perhaps at their lowest levels sin the early 1960’s.
>> and optimism about the future, however, in the face of growing pessimism about america’s present situation. now, so far the only thing showing is the stock market. people say the conditions are actually getting worse. jobs are harder to find this month and business conditions are worse compared to may. in fact, people say the economy is as bad as it was in march when the iraq war began. and that’s led to consumers to cut back on their plans to buy homes, cars and appliances. so are consumers’ expectations that the economy improve just wishful thinking? an economist says that the fact that they are way down is evidence that he says people are saying just that. he says people are saying the future is fantastic, but i won’t buy anything. and that he says just doesn’t make any sense. a j.p. morgan economist says consumers’ feelings are in line with conditions.
>> i think what consumers need over the next year for their decisions to be validated is an improving economy and labor market. i think right now that’s the key. is getting the growth, getting the labor market improvement that consumers and the fed is hoping for here.
>> and as we’ve been reporting, the fed is expected to lower interest rates tomorrow to ensure the u.s. economy creates jobs.
>> if we don’t hurry up and see something in terms of material drogs growth, consumer spending could slow enough to stall the economy, if not worse.
>> and consume spending accounts for 2 thrds of the u.s. economy so. economists are concerned about today’s fragile outlook, even if people are more optimistic about the next six months. lane, back to you.
>> carmen roberts. stocks rose today, and some investors said berge mark indexes may extend this year’s gains as the lowest interest rates in four decades for a recovery in the economy. and of course, market watchers expected federal reserve to lower its benchmark rate tomorrow. the dow jones industrial average, up 36 points at 9109. the s&p, better by nearly two points while the nasdaq was down 5. big board volume, just you should 1.4 billion shares with advancers outpacing decliners 17-15. and we take a look at the nasdaq, 1.6 billion shares changed hands. and advancers over decliners 16-14. take a look at the wilshire 5000. you see it up 18 points on the day. 9387. treasuries rose amid the biggest division in sick months about whether economists say the fed interest rates will be cut by a quarter or a half percentage point tomorrow. take a look at the 10-year note. you just saw, it’s gone. three-year, up to 1.3% atched two-year note, 1.09%. the dollar rose against the euro after an industry report on consumer confidence exceeded forecast. well, the price of crude oil fell to a four-week low on forecasts the u.s. energy department will report the fifth increase in six weeks. the close is $28.74 a barrel. gold futures fell 2%. stocks took a wait and see attitude before tomorrow’s fed decision. as deborah kostroun stell teles us from the new york stock exchange. deb?
>> well, lane, at our best level today, the dow jones industrial average was up 67 point. we didn’tite make it there at the close. and many traders talking about the fact that things down here a little bit and maybe market a little bit frozen until we get the read from the fed l. it be a quarter, will it be a half point. but obviously today, the consumer confidence number. got a little bit of a bounce on that. better than expected june report. and retailers advancing, after the consumer sentiment number, really kind of easing concern about that slowdown in spending. we did see some of the retailers gaining in today’s session. also pharmaceuticals, among the best gainers in the s&p 500. bristol myers a little bit lower. merck saying its treatment can help prospects in some cancer patients. now, asbestos-related shares at the top of the news today. that as senators agreeing on some medical criteria related to legislation that’s now going cap claims against companies that have made products with asbestos. so now the law is recreating a $108 billion fund to settle claims with asbestos-related diseases. so those stocks getting a lift on that news. something we’ve been seeing for the past three sessions, what time the market today at least went higher, we saw technology lower. today, being led lower by advanced microdevices. they cut their second quarter sales forecast and also the company had losss in seven straight quarter. in fact, back in 2002, losing sales to intel and some analysts saying they really hadn’t gained that. some of the other technology stocks a little bit lower. but in addition, we did see some of the telecom stocks lower a little bit, a cousm stories going on. cisco had their rating lowered to neutral from outperform. saying they’ve had a recent run-up and just a lack of evidence about growth prospects. corning also coming out and repeating their prediction that they were going to end a streak of eight straight losses this quarter. mainly because of cost reductions. and those cost reductions coming from job cuts. back to you in the studio.
>> deborah kostroun at the new york stock exchange. cisco shares were downgraded. bob bowdon is at the market site with more details.
