Market briefing---Lane (medium)
Nasdaq---Anthony (slow)
Verizon---Carmen (fast)
>> welcome back to “world financial report. i’m lane bajardi in new york city. recapping the day on wall street. dow jones industrial average had kind of a choppy move, moved lower there following the consumer confidence number at 10:00, which came in lower than expected, and rebounded to turn lower in the afternoon by 62 points at 9204 at the closing bell. same story for the s&p 500. moved lower on consumer confidence and then rising to nearly the high of the session in early-afternoon trade, then turning lower and down 7.25 on the session. nasdaq composite down .25%, four points at 1731. among the most actives at the new york stock exchange, pfizer and tyco moving lower, nortel was better by a dime. checking on u.s. treasuries, falling for a fourth day, the longest losing streak since october as a pending flood of new debt sales by the government next week made existing securities less appealing. the yield on the 10-year note up to 4.44%, down 1.25 points. the five-year note down .25 points. the three-year note down 10/32. much of that move is in the last hour and a half or so. the two-year note down, as well. currency action, expected to see increases in european employment. the nasdaq fell a fraction of a percent, but some nasdaq stocks moved more than that. anthony massucci has details from the nasdaq marketsite in times square.
>> we saw shares of nvidia fall today, falling 6%. history on the company, back in may, chief financial officer said he expected second-quarter sales $450 million but today they say it was below the company’s forecast back in may and below analysts’ estimates and with that, the stock fell. now, second-quarter gross margins also looked to be slightly below forecast due to higher-than-expected production costs. nvidia, they make xbox chips and with that theme going on here, let’s talk about a company called immersion. the stock was up 128% because microsoft is investing $26 million in the company for the right to use its patents. the patents are used in video games and let players get a feel of the movement of cars and racing games so you can feel the road beneath. microsoft will receive the licensing rights to the patents and with that immersion stock was boosted. one shock that went in the other direction, amkor technologies, the world’s biggest assembler of computer chips. they may report a third-quarter loss of two cents. with that, the stock was lower. the stock was up 300% in the past year before today. but net-e, up 2900% in the past year, netease. today, the company said second-quarter profit surged and sales more than tripled. it was the nasdaq falling. back to you.
>> anthony massucci at the nasdaq marketsite. verizon had a second-quarter net profit of $338 million as its wireless division added more customers than any u.s. rivals. but the biggest local telephone company in the u.s. plans to cut as many as 5,000 jobs this year as demand slumps for local phone service. carmen roberts has more on the story.
>> wireless is so important to verizon that c.e.o. seidenberg started packaging it with other services to keep the local phone customers. it was verizon’s 14% jump in revenue to nearly $5.5 billion that helpe help cement the company’s second-quarter profit, strong numbers according to one fund manager at ernest partners. he said verizon is doing what it needs to do to be successful in the long-term. verizon’s second-quarter net profit was 12 cents a share. a year ago, it lost 78 cents. the profit on continuing operations, 69 cents a share, a penny better than analysts expected. the net income of $338 and reaffirming the full-year forecast with sales being flat. argus research analyst, kevin cacalabreeze says he. expects the 2003 profit will come in the middle of that range.
>> in near-term, they have improving financials and a strong balance sheet. they have debt, but more cash flow than others to pay that down. they’re growing will wireless operations and have a strong cash flow base in the local. they’re expanding long distance, rolling out d.s.l. they’re cost conscious and right now the stock is cheap.
>> verizon trades at 13 times this year’s expected earnings, lower than the s&p 500’s p.e. ratio of 18. the main question for verizon’s growth is compensating for the loss of those local customers, that is, its core phone service business.
>> the real worry there and the problem is are they able to ramp up new services fast enough t to make up for the losses in the core wire-line company business that is shifting to wireless to, internet, to fiber, to whatever new service. are they able to do it fast enough?
>> and calabre believes verizon can push those initiatives forward quickly but believes it is still a risk.
>> carmen roberts. dupont shares were down even after they came out with better-than-expected earnings. analysts say the stock fell because the company benefited from a lower tax rate which may have added as much as seven cents a share to profit. in the second quarter, dupont said sales were up from a year ago. the operating profit was better than analysts’ estimates. dupont sales up 12%, also topping wall street estimates. honda raised its full-year forecast on a more stable yen and more profitable models. we’ll go to the tokyo bureau when we return.
