Market briefing---Lane (medium)
Focus on Pfizer---Su (fast)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
welcome to “world financial report”. i’m lane bajardi in new york. pfizer shares closed 1.5% higher as the world’s largest drugmaker said it would rebound from its second quarter loss with new drugs and cost cutting measures. the second quarter net loss of 48 cents a share or 3 $3.5 billion is the company’s third quarterly loss in a decade stemming from costs related to the april acquisition of farm see a excluding those costs earnings beat analysts’ estimates by a penny a share. sales rose 37% from last year, help by the additional revenue from farm see a su keenan is here now with more on the company’s outlook. su.
>> lane, fiser executives say they expect merger savings of almost $4 billion in 2005, an annual profit gains of roughly 16% through next year. the c.f.o. told investors, “you are looking at a new integrated company that has unprecedented power.” many investors and analysts say they expect the company to deliver on its promise of developing new drugs, and they say that is the key to the company’s future growth. pfizer is the world’s largest healthcare company, with a market value that is 70% greater than the next biggest competitor. johnson & johnson. yet six of its biggest drugs face generic competition in the next four years. its best seller, lipitor, which dominates the market for cholesterol drugs, faces a challenge as early as next month from astra zeneca’s rival drug. john fisher, a buy side analyst at fifth third bancorp, is confident pfizer can maintain its core revenue growth.
>> lipitor is the most important drug for pfizer. the growth of lipitor has been slowing over the last couple of years, but it’s still a double digit growth product. you know, i’ve kind of bench marked growth of 10 to 12% for the product for this year, and for next year, and, you know, i think pfizer can manage to that type of growth.
>> ef also has a 12-month target price on the stock of $40, shares closing at $33.04 today. meanwhile eric thorne who helps manage $1.7 billion in assets, including pfizer shares for bryn maur trust says the company’s cost savings “will buy the lab some time to come up with new drugs.” bank of america’s sarah roche is bullish on pfizer’s pipeline.
>> they do have a pretty interesting looking pipeline with some new products out there including a heart failure drug, an insomnia drug, smoking cessation product, and they are also so big that patent expirations and competition on any one drug is a little less impactful for pfizer, because they are so large. and then finally they have some cost cutting opportunities.
>> pfizer shares closed up 1.5% higher on the day. they are up 8% year to date. lane.
>> su keenan. earlier today the u.s. government reported durable goods orders surged in june, the best showing since january. the 2.1% increase is a full point better than economists predicted in a bloomberg survey. demand for cars, aircraft and machinery fueled that gain. excludinging transportation equipment, orders rose 1.4%. and that is also the biggest rise in five months. these figures bounce around a lot from month to month. economists say a sustained series of gains indicates growth. weak demand and excess production capacity have been holding back the economy. u.s. sales of new homes unexpectedly rose to a record in june, spurred by the lowest mortgage rates ever.
>> the current mortgage rate, at least according to the freddie mac survey, of 5.9%, is still below last year’s figures, and will be one of the lowest in over 45 years.
>> at the current pace, based on bloomberg projections, new home sales for all of this year would reach a little over $1 million, even higher than last year’s record. at the same time existing home sales are down .3% for may. that decrease in existing home sales may reflect some weakness in the labor markets, but historically low interest rates should continue to support home buying activity, leading to a record setting year for new and existing home sales.
>> stocks rose on friday, thanks to better-than-expected corporate profits and the day’s durable goods report. let’s run down the numbers for you. dow jones industrial average up 172 points, 9,284. s&p 500 up 17 at 998. nasdaq with a gain of 29 points, settling at 1 rks 730. volume in the new york stock exchange, as you might imagine, below average because of the fact it’s a summer friday, 1.3 billion shares changing hands, two to one margin in favor of the gainers on the nasdaq. similar story here, only 1.5 billion shares changed hands advancers over declines 18 to 12. the wilshire 5000, is the broadest measure of the market. look at that, similar to the dow s&p and nasdaq on the day, strong gains and momentum going through the afternoon for gain of 1.5% on the wilshire. treasuries, however, fell friday extending their losses after a poor showing in the job recovery and a higher than expected durable goods report. the 10-year note had the biggest drop since 2001. you can’t tell from the last oat it was down 2/32 for the day though it was a rough week. two-year we see motdest gains. dollar had its biggest weekly decline against the euro/dollar on speculation european bonds poised a gain against u.s. treasuries. that erodes demand for u.s. currencies. earning season 2/3 completed we’ve seen changes in leadership. deborah kostroun is at the new york stock exchange. she has more on stocks that are outperforming the former leaders.
>> since the low on march 11th, it seems one of the areas of the market we continue to look at is how wonderful tech has been performing. just over the past couple of weeks we’ve been seeing changes, and in particular this week, the s&p materials index really kind of shining brightly. in fact, this week of 5.5% far and away the biggest leader. in fact, we also saw its biggest weekly gain in nearly three months. that, of course, since the start of may. and in fact we’ve had four weeks in a row now that materials have been on the rise. in fact, some of those material stocks that performed quite well we had alcoa, also dupont. dupont reports their earnings coming out next tuesday. alcoa, they’ve been up for the last four days. alcan hitting a 52-week high in friday’s session. and another area of the market that seems to be showing quite a bit of promise, that’s some of the metals. and in fact if you take a look at some of the metals index, you can see what it’s been doing over the last couple of weeks. in fact, an analyst with hsbc, an alcoa analyst, tony lesiak, he’s saying the metal price rally we’ve been having is hitting kind of hard. he says there is not much to be aware of in the way of fundamentals but this could be an economic recovery theme or just a flight to safety. however, we do see some of those metals also performing well, along with the cyclicals. take a look at the cyclicals in comparison with the nasdaq, now outperforming the nasdaq, ands those materials still seem to be performing quite well in this kind of environment, as we are talking about the cyclicals making a really good run in friday’s session, some of those cyclicals, even some of the chemicals as well, chemicals performing quite well. these are some names that we really haven’t spoken about too much recently. we’ve been focusing on many of the tech hardware names, a little bit of a change of pace, lane. back to you.
>> deborah kostroun at the big board.
>> the nasdaq in the meantime had its best daily gain in three weeks. it closed higher for the week as well. anthony massucci has more from the market site.
>> with that up move for the week we saw a turnaround in the nasdaq today. in fact, without the turnaround it would not have been up for the week. we spoke with richard nash as victory capital management. he said one of the reasons you are seeing investors optimism increasing is the first time in three years that we’ve seen analysts increasing estimates for the third and fourth quarters. he points out that he thinks revenue and profit will increase for companies, the economy will grow. in fact, again, given reasons for optimism here. now, ebay might be a good example. at one point the stock was down as much as $6, but with optimism coming back in the tech stocks that stock closed the day still down, but down $3.50. so it regained about half of the move. they said third quarter profit and sales will be less than what analysts were looking for. also fourth quarter sales will miss estimates while profit will match, so with that investors taking the stock down. remember, second quarter profit beat estimates on the sales side and profit. ebay said they will split their stock two for one at the end of next month. the stock has more than doubled in the past year, even with today’s drop. let me show you some of the other internet stocks . amazon rebound todd close higher yahoo rebounded but still closed lower by 40 cents. home store, their listings will be listed on yahoo. that stock up about 30% today. priceline shares hit a 52-week high today. they have almost tripled over the last 12 months. last night priceline beat in all assessments by four cents. 10 cents is where they came in. six cents is what they beat. hotel bookings really helped out at the company. let me show tu move in software stocks . no news but microsoft, oracle up more than 3%. the nasdaq up for the day. back to you in the studio.
>> anthony massucci at the nasdaq market site. coming up next we’ll talk to rafael costas, co-director for municipality bond research at franklyn templeton.
