Market briefing---Bob (medium)
Gold futures rose---Lane (medium)
NYSE---Lane (medium)
Viacom---Bob (medium)
Grasso---Bob (medium)
>> welcome to the final hour of “world financial report”. i’m bob bowden. the price of crude oil in new york rose after opec unexpectedly agreed to cut production by 3.5%. opec wants to combat declining crude prices and rising supplies. crude futures were up 4% to $28.24 a barrel. also gold futures rose to their highest closing price in seven years in new york trading. the dollar’s decline made the metal cheaper for international investors.
>> well, the world’s largest gold producer expects annual gold sales to rise 5.5% by 2000 sven. newmont mininging saying gold reserves in gana will double by the end of the year. the company expects its projects in gana, australia and nevada to generate double digit rates of return. separately newmont agreed to acquire a 25% stake in a nevada gold deposit from placer dome as part of a joint venture. newmont shares at the close were up 11 cents, up 1 quarter of 1% to $24.17. earlier the stock hit its highest level since october, 1997. the oil story we mentioned weighed heavily on stockss though it led to gains for several names in the energy business. lane bajardi is at the big board with a wrapup of the action there. lane.
>> bob, thank you. the benchmark stock indexes have surged since touching this year’s low back in mid march on optimism a growing economy would boost profits. however, investors are now concerned the higher energy costs may actually hamper that growth.for instance, kurt bruiner helps manage $1.3 billion for swathmore group in westchester, pennsylvania. he says it’s the oil price concern that puts the negative tone in the market today. he notes high oil prices are an additional cost it is that affects operating margins and income. the cut by opec has a clear effect on the price. it affects the amex oil index. 12 members were up for most of the day. let’s look at some of them right now. we can see exxon mobil, however, late in the session turning lower with chevron texaco and conoco phillips. it’s a remarkable turn around for these oil names, which i said were up for nearly the entire session before closing out a bit lower. now, spanish oil company repsol was among the decliners in the xoi as well. these a.d.r.’s were down because a mexican newspaper said pem exis looking to sell its stake in repsol. it’s denying the report.
>> looking at the oil services companies, still higher, higher throughout the session and closed out that way as well on the oil price move. but more expensive oil is not good news for chemical companies. they need oil to make the chemicals. paints, plastics and other products. that means that they are headed for higher costs. chemical makers looking lower at the close of the day. dupont and p.p.g. each down more than a dollar, as was rohm & haas. manufacturers also were hit by the oil move during the day. 3m, caterpillar, daimler chrysler among the claims as well as illinois tool works all lower. also affecting daimler chrysler, by the way, a report it will reduce production in germany due to a change in the market situation. forest labs, late breaking, the final hour of trading, it was up 6% at the close on word it moved closer toling the first medicine in the u.s. approved to treat the most severe cases of alzheimer’s disease by winning the backing of the f.d.a. advisory panel. that was positive and a big move up at the end of the session. mcdonald’s, also a mover during the day, rising to a new 52-week high, then turned a bit just up three cents during the day as things closed out. the hamburger chain boosting its annual dividend by 70%, the largest increase in 25 years. a look at some of the stock movers on the day at the big board, robert, back to you.
>> viacom shares were lower today after the company reduced its full year forecast for profit and revenue. viacom attributed the move to weakness in local advertising which has not picked up as fast as the company expected. half their revenue comes from advertising. while national advertisers have boosted their spending, analysts’ estimates say ad budgets in local markets have not yet seen the same rate of recovery. viacom’s statement said revenue growth will be in the mid to high single digit percentage increases. that compares to the previous forecast which it just increased in july. it was for high single digit growth. for operating profits the new forecast also rather vaguely stated here was for mid to high single digit growth, and that compares to the previous forecast for operating earnings at a double digit increase. the company did point out that 2003 will be a record year for revenue. net income and operating income. also it said the 2004 will bring improving local advertising, driven by an improving economy, political advertising. it’s an election year, and the super bowl on viacom’s cbs network. this year’s super bowl was carried by rival abc. ron young, a portfolio manager with evergreen investmentses it’s not unusual for a recovery in local advertising to lag a recovery in national ads.
>> as you see confidence pickup in the local communities in the business, communities there, they tend to feed off the national advertisers. so i would say it is a lagging indicator.
>> angela kohler, an analyst at federated investments, says it would be a mistake to assume that viacom’s troubles are industry wide.
>> viacom i think has some problems that are very specific to that company. that is a large local advertising exposure. particularly on their radio group. many of the other multimedia companies just don’t have that local exposure, via less radio or no raid row specifically. i think overall the ad market is rebounding. we’ve seen that through very strong upfront numbers that have been sustained by a lack of cancellations.
>> in today’s session, viacom shares were down 3.5%. viacom was the third most actively traded stock on the new york stock exchange today. other media stocks fell in sympathy. a.o.l. time warner down 47 cents. disney down 39 cents on the day.
>> well, the incoming chairman of the nyse came down on the side of critics who say the exchange board needs an overhaul after approving almost $188 million in payments for then chairman richard grasso. john reed tofld bloomberg news the board of directors needs, “fresh blood.” he also said he favors shrinking the board to 10 to 12 people from its current size of 27. reed is vacationing off the coast of france and may return to new york as early as tomorrow to assume leadership of the exchange. today 10 state treasurers and pension fund managers went to the exchange to call for structural changes. they also wanted independent review by the securities and exchange commission, and a conclusion to the issue of grasso’s pay.
>> no one declared an individual mea culpa. what they did say is they understood the terrible mistakes that have been made by the board the lack of transparency as an institution. and we were not there as a grand jury. we were there as reformers looking to dramatically change the institution. there was a clear understanding that there will be substantial changes on that board.
>> also s.e.c. chairman william donaldson demanded that other securities markets explain how they set compensation for their executives. it was a similar request from donaldson that helped touch off the nyse controver i. we have breaking earnings news from micron technology. the company reporting a fourth quarter loss of 20 cents a share. also saying that revenue figures in the fourth quarter came in at $889 million, that better than the $868 million estimate by analysts polled by thomson financial. micron announcing intel will be investing in micron, actually a total of $450 million investment from intel into micron. that’s in exchange for 33.9 million shares of micron. once again, micron to issue stock rights for 33.9 million shares in exchange for the $450 million from intel. we’ll have more on micron as it becomes available. tupperware says u.s. sales will be down 30% for 2003. it blames a smaller less active sales force. the company says it will lose two or three cents a share in the third quarter. analysts had expected a seven continue profit. for the full year tupperware says it will earn 76 to 81 cents including gains and charges. wall street was expecting a profit of $1.04. in the regular session we saw tupperware shares down 12 cents or about 3/4 of 1% to $16.34. well, moving on, bed, bath & beyond out with results for its latest quarter. the company reporting earnings of 32 cents a share. that’s 28% higher than a year ago. and checking analysts expectations, it was 30 cents a share, beating expectations by two cents a share. revenue coming in at $1.11 billion, 23% over last year’s figure, and slightly above the thomson financial estimate. sales at stores open more than a year rose 5.9% for the period. that’s less than the 8% rate of last year’s fiscal second quarter. in the regular session we saw bed, bath & beyond shares down about 2%. when we come back, the u.s. economy is gathering a head of steam.
