Market briefing---Lane (medium)
Spending trend--- Su (fast)
NYSE---Deb (fast)
>> welcome to “world financial report”. we are glad you joined us. i’m lane bajardi in new york. and shares of u.s. retailers closed higher in today’s session after several companies reported july sales rose more than forecast as shoppers took advantage of discounted summer clothing and merchandise. sales of stores open at least a year climbed 4.3%. that’s the biggest gain in 13 months, according to tokyo mitsubishi which traction retailers. wal-mart stores, the world’s biggest retailer, said sales of u.s. stores rose 4.6%, beating the top end of its own forecast. target, the number two discount chain exceeded analysts’ estimates estimates of july sales by 1 percentage point, and gap which is the biggest u.s. clothing chain said sales of july jumped 9%. the big question for analysts and investors is whether this spending trend can last. su keenan has been looking at that and joins us with more. su.
>> analysts say the upcoming back-to-school sale season will be a more important indicator of consumer spending trends. even so, stephanie hoff of banc of america capital management which manages $260 billion in assets says these july numbers show, “the consumer is starting to spend.” now, she is optimistic. the earnings growth for retailers will accelerate in the second half. analysts say july is typically a hard month to read with clearance sales and promotions to sell excess inventory skewing the results. jim luke who helps manage $11 billion from bb&c asset management sees signs of improvement. he interprets the performance of best bias evidence of a pickup in spending. the stock , as you can see, soared more than 14% today, the largest electronics retailer raised profit estimates and sold more expensive items such as digital tv’s.
>> all in all we are not looking for a boom, but we believe that we are getting to the point where we have an economy that is self-sustaining, and can make progress from here and probably pick up some momentum in the second half of the year.
>> a similar view from deutsche banc’s bill dryer. he says the july numbers, “bode well for back-to-school spending” and says it appears the fiscal and monetary stimulus appears to be having its desired effect. deutsche banc is raising its current quarter e.p.s. estimates for wal-mart by two cents a share. wal-mart saying consumers’ extra cash from mortgage refinancing and the tax cut helped boost sales. several states now offer a temporary exemption from sales tax as an added incentive to shop. adding all these elements analysts and investors are saying retailers are continuing to give indications that business is getting better.
>> su keenan.
>> mcdonald says u.s. sales rose 9.9% in july. the increase was driven by demand for new salads and their new mc griddle breakfast sandwiches. sales at restaurants open at least 13 months increased for the fourth straight month after declining for more than a year. they boosted employee training to bring back customers who have left for rivals such as burger king. checking after-hours actions, mcdonald shares better by 14 cents. up 37% in the past year. pixar reported profit last quarter soared 87%, boosted by “finding nemo”. the computer animation studios’ net income climbed to $19.5 million, while sales more than doubled from a year ago. earnings pr share, 34 cents, 12 cents better than forecast, shares of the company which is headed by apple computer chief executives chief jobs, fell in the extended session, we see it down a half percent right now. pixar lost 3% in regular trading. the shares have climbed 57% over the past year. shares of nvidia rose in extended trading after reporting profit quadrupled in the second quarter. net income up to $24.2 million, increased by that amount or 14 cents a share, up from three cents a year earlier. and revenue rose more than 7% as the company sold more new semiconductors. shares nvidia whose chips are use nd personal computers and video game machines have climbed 118% over the past 12 months. shares of univision have just resumed trading in the extended session. the largest spanish language television broadcaster in the u.s. said second quarter profit climbed 87%, $41.6 million or 16 cents a shares three cents better than analysts’ forcasts. revenue decreased from a year ago and missed estimates due to a drop in television sales compared to last year when it was broadcasting world cup soccer. univision attracts 80% of spanish language viewers in the u.s. shares have fallen in the regular session.
>> treasuries rose in new york trading, the highest interest rates in a year lured investors to today’s $18 billion sale of 10-year government notes. you see the 10-year better by 13/32. on the shorter end the three-year note up 5/32, two-year note up 3/32. stocks up for a second day as large retailers, wal-mart and best buy said quarterly earnings will exceed forecasts. let’s run down the numbers. wal-mart, a key member of the dow and s&p, dow up 64 points, s&p better by seven. nasdaq down a half point. big board volume 1.3 billion shares, and advancers outpacing declines. same―not the same story in the nasdaq. 1.6 billion shares changed hands with a delir over advancer situation 16 to 14. wilshire 5000 is the broadest measure of the market and we see it up for the day about 6/10 percent. and the dollar fell for a fourth day in five against the euro/dollar and had its biggest loss against the yen in a month during trading today. the declines came on speculation a narrower u.s. treasury yield advantage over other government bonds may be curbing foreign demand for the currency. the price of crude oil in new york rose to the highest in almost five months on concern that violence will keep iraqi oil exports below pre-war levels closed 2% higher. natural gas futures in new york jumped more than 7%, the steepest rise in three months. the u.s. government reports reserves had the smallest gains since may, increasing concern about shortages next winter. gold futures rose for a fourth straight day in new york as a slide in the dollar against the euro/dollar made the metal cheaper to european buyers. gains in natural gas futures helped boost stocks in that industry. deborah kostroun is at the new york stock exchange with details about that.
>> well, obviously, lane, many of us really kind of talking about retail. that was the big story in today’s session with those july receipts coming in better than expected. but energy really kind of creeping up there and performing quite well. in fact, that amex natural gas index makes its biggest gain in two months. it was up 2.3%. and in fact the amex natural gas index rising for a second day. this comes after seven days of declines. of course, the big story here. can you see the impressive gains we saw in many of the natural gas stocks . and the big story here is that natural gas inventories looking like we could see a shortage coming up in the winter. and so one of the reasons that there is concern and obviously price jumps as well. then also actually lends itself a little further down the road to wondering what kind of prices that consumers will be paying for electricity during the winter. now, not only did we see natural gas, but we also saw many of the other energy-type related stocks and also oil stocks . you can see the s&p energy index. it was up 2.03%. some of the components of this as exxon mobil. they also have a natural gas unit as well. and very closely related to that. so one of the reasons we did see oil and gas, also oil services, also performing quite well. in fact, the oil service index, you can see one of the best individual performers in today’s session. it was up over 4% the obviously many of the components of that putting in some impressive gains. not only did we see oil stocks , but also drug stocks putting in a really great performance. we saw merck with a pretty good gain, their biggest gain since june. also wyeth, the biggest not since june, abbott, very similar story, along with johnson & johnson. in fact, what we did see by the close of trading, drug stocks really ramping up in that last hour of trading where we did see so much of the―or at least a little more of the gains being tacked on in the drug stocks , really a part of that picture. back to you.
>> deborah kostroun at the big board. the big board is where dial corporation trades under the ticker d.l. we have news from dial coming across the bloomberg professional service. it’s going the buy back up to $100 million worth of its sharks which, by the way are flat year to date. haven’t seen much activity, certainly have underperformed the broader market indices. as we take a look at that, they are raising the dividend by 125% up from four cents per share to nine cents per share for dial corporation. that’s just crossing right now. we’ll see what kind of action if any it will affect dial shares in the extended trading as we move on. meantime, one of the concerns echoed on wall street this week was the threat of the rising yield on the 10-year and what it may do to stocks and the economy down the road.
