Market briefing---Lane (medium)
Mr. Grasso---Su (fast)
NYSE---Deb (fast)
Break down all the after-the-bell numbers---Carmen (fast)
>> welcome to “world financial report”. i’m lane bajardi in new york. now to our top story at this hour t the change in leadership at the new york stock exchange. in a late day briefing exchange director h. carl mccall said he will serve as lead director and spokesman until a successor is chosen. mccall said board members have agreed to meet as often as needed in order to secure a new chairman and initiate new governance procedures. grasso was forced to resign amid mounting criticism his pay was excessive. su keenan is here with more.
>> the new york stock exchange board is faced with the task of finding a new chairman and c.e.o. at the same time repairing some of the damage to its credibility. the head of the board’s compensation committee, h. carl mccall now serving as the interim director of the exchange says it’s too soon to offer details about who will take richard grasso’s place.
>> i have not yet identified leading candidates. a number of names have come from a number of sources, which is very good. i like the fact that we will have such good choices. and we are just beginning. let’s interim that at about 11:00 last night, you know, we made the decisions that we did, and we have not yet―you know, we have to go forward in a deliberative way. we can’t just―i don’t think we should quickly make decisions.
>> mccall says that grasso has agreed to assist in the transition. details of his severance have yet to be worked out. richard grasso was, of course, the public face of the exchange, presiding at opening bell ceremonies, escorting dignitaries through the trading floors, among other duties. his successor will have a more important job, restoring whatever trust was lost during the controversy over a pay package totaling close to $190 million, and widely criticized as excessive. to do that the exchange may turn to an outsider.
>> with him gone i don’t know what the future is, but hopefully it will be someone who has the same views and opinions as dick grasso.
>> from those who work on the floor of the exchange to the public pension fund managers in north carolina and in california who called for change earlier this week, there is keen interest in who will be chosen.
>> i have two very very good people in mind that could do the chairman and the c.e.o. job. they are great people. one, of course, i think is my primary choice and would be william mcdonough.
>> william mcdonough, the former head of the federal reserve bank is said to be among the candidates. mc dhunna heads the committee to set new standards for the accounting industry. another proposal, berkshire hathaway warren buffett, an outspoken critic of executive agreed. and paul voulker, former chairman of the federal reserve. another name being discussed the former treasury secretary robert rubin. he told cnbc he was not approached and would not take the chairman’s job on an interim basis. arthur levitt may be under consideration. he’s a current board member of bloomberg. mccall did say that a board meeting has been set for as early as tomorrow on this very issue.
>> su, mccall also said he is not interested in the job himself. su keenan reporting. now, mccall also discussed other compensation issues at this event. said the exchange is still reviewing richard grasso’ss package with him. by some interpretations of grasso’s contract he could walk away with an additional $57 million. mccall also says the nyse will publicly report the pay of top executives. mccall also said he spoke with s.e.c. chairman william donaldson and will brief the board on that conversation. he said they discussed the naming of an active chairman for the exchange. mccall said they are not going to disclose the top official’s pay right now at this point. they are not going to do it until the annual report comes out next year. among all the turmoil at the new york stock exchange,ed’s trading ended in big gains. deborah kostroun is at the big board with a report on the trading action that was under way on the floor. deb.
>> it certainly was, lane. in fact, what we did see, some heavy gains, not only in the dow jones industrial average, but also in the s&p 500, closing out the dow with a 14-month high. the s&p 500 15-month high. in fact, this eclipses those major gains that we saw in the beginning of september. be kind of pounding on that, getting in and out of those trading ranges. the intraday high on september 4th and the dow jones industrial average, 9,609. today we blew through that. s&p 500, the hold intraday high, 10,032, closing above that as well. now we are getting into critical areas. david briggs at federated investment management, saying now that we have accomplished close to his 10,050 objective in the s&p 500 he says he’s getting a little nervous, laying out reasons why stocks could move higher, among them lower oil price, also a drop in bond yields and the expectation that third quarter earnings will meet analysts’ consensus forecasts. however, one trader i was talking to, peter henderson, fleet specialists, says over the next couple of weeks if we do get a lot of companies that are saying that they will not meet their third quarter or fourth quarter numbers, that could likely cause this rally to crumble. so definitely we’ll be looking at that. in tomorrow’s session we have the expiration of four options contracts. that could result in a volatile session for equities. we’ll have to wait and see on that as well. that is one thing we are looking forward to tomorrow as we don’t have any economic reports to speak of. today, financials, they led the way. in fact, seeing a 52-week high in that s&p 500 diversified financial index. bear stearns leading the way higher on their earnings, earnings coming in almost double. this is on the fact that they were packaging mortgage with some debt securities. amex broker dealer index, what we did see in today’s session, rising, in fact to its highest level in about 2.5 years. bear stearns part of that. other broker dealers joining in with bear stearns and performing quite well, and bank stocks performing well, in addition. being to you, lane.
>> deborah kostroun at the big board. nike’s first quarter net profit rose to 261 million as sales increased overseas and ended a dispute with foot locker. carmen roberts joins us to break down all the after-the-bell numbers.
>> good numbers for nike, definitely. as an analyst with mc adams, wright and reagan says nike is really an international story. those sales helped push first quarter net earnings to $261 million or 98 cents a share 10 cents better than analysts surveyed by thomson financial expected. a year ago nike, the world’s number one athletic schumacher posted a loss of 118 cents. revenue topped $3 billion, the highest single quarter revenue in nike history. analysts expected $2.9 billion compared to a year ago’s $2.8 billion. gains in asia and europe boosted international sales, which last year made up more than half of nike’s total business for the first time. in the u.s. nike’s biggest market, orders picked up from the previous quarter after c.e.o. phil knight met in july with foot locker c.e.o. to try to resolve that feud that has hurt both company’s sales. john shandly who does not own nike shares says with the feud over, the orders should improve more than they did in q1.
>> the relationship has improved but you will not see it in the current future numbers. it will be more apparent as the company reports its second quarter results three months out.
>> nike says worldwide future odds from january, 2003 to 2004 rose 10.5%. in the u.s. they fell 3%. europe gained 28%, asia rose 19%. now, this is a turning quarter for nike, according to an analyst with independence investments, who has about $2.5 billion in assets. they include 1.5 million shares of nike. and checking on the shares of nike in after-hours trading, you see they are up 4%, and heading higher. so nike’s conference call just getting under way. we’ll have any breaking news from that for you in the next hour. so lane, the latest on nike, back to you.
>> stock prices are telling us one thing. but are the market technicals telling us something very different? take a look at the markets from a technical perspective when the chief market analyst at shields and company joins us on the set to go over bloomberg screens to get an idea on what is happening with this market. stay with us.
