Market briefing---Lane (medium)
Alleged trading violations---Su (medium)
NYSE---Deb (fast)
>> welcome back to “world financial report”. i’m lane fwhij new york. we capping the day on wall street, dow jones industrial average down 11.33 at 9,791. the s&p 500 up 3 1/3 at 1,050. nasdaq composite up 11 points settling the day out at 1,950. big board most actives, e.m.c. corp, nokia and lucent tomg topping the list on the day. new york stock exchange plans to find five specialist firms for trading violations, in the wake of a six-month probe of alleged trading violations. the exchange referred to the fines as substantial and said it will seek compensation for investors’ losses due to such trading. su keenan has been following the story. she joins us with more. su.
>> lane, the announcement of substantial fines and the specific alleged violations indicates how serious this investigation has become. the results of the probe also add weight to criticism that the exchange’s more than two century old auction system and its reliance on floor traders drives up costs for investors. the new york stock exchange in a statement released today says that five specialist firms, which include the publicly traded firms van der middle schoolen, holding and labranche, denied buyers and sellers the best possible price on transactions at participate nothing trades when they weren’t needed, and taking a fee for their services. several firms say it’s too early to know if the new york stock exchange’s charges have merit.
>> there could be possible explanations why these patterns in those statistical analyses appear. it is that kind of opportunity we haven’t had, nor have anybody else, i understand.
>> the exchange says it will seek fines, possibly record fines of up to $150 million, according to the “new york times”. officials will also examine the idea of imposing change on the firm’s trading practices. the s.e.c. became involved with the exchange after its probe and urged i its expansion. exchange officials stay probe examined $2 billion shares traded over a period of three years from 2000 and 2002. interim c.e.o. john reed today defending the specialist system as he told the house financial services committee in washington that some specialists, “did misbehave and break the rules.
>> from ever were to come to be a time when the specialists system didn’t service well, we would have to acknowledge that. at this point we don’t believe we are there.
>> shares of the two publicly traded specialist firms both hit new lows for the year. le branch shares ended the session down 10%. van der moolen holding, fell 15%.
>> wayne.
>> su keenan.
>> deborah kostroun sat the new york stock exchange, and investors were waiting for those important economic reports earlier today, but they apparently didn’t have much impact on where stocks closed out the day. deb is here to explain.
>> well, in fact, lane, it seems the market was more focused on all those earnings reports that came out today, not only today, but all this week and all next week we have half the companies in the s&p 500. they’ll be reporting their earnings. and so we have a lot of focus on the earnings, and really kind of ignored the really good news that we got about the economy. that philadelphia manufacturing survey coming at its best level in seven years, not only that your initial jobless claims coming at the lowest level in eight months. and so those two very positive things that really kind of show that the economy is growing. and as we are talking about our growing economy that usually adds to growing profits. but interestingly enough, robert parker, he is the deputy chairman of credit suisse asset management coming out today and talking about the growth for corporations in the first half of 2004, the profit growth is going to slow to about 7% to 10%. compare that to what we are looking at right now in the second half of 2003. he says an average of about a 20% growth. so at least what he is expecting things to be slowing down a little bit in the first half of 2004. and obviously we have been hearing quite a bit of things about consumers still spending quite well here in the third quarter, and with some of the other economic reports that have been coming out. that helping to boolt booft some of the profits that we did see. the comps in comparison to a year ago also pretty easy. at least that’s what some investors have been talking about. and so when you compare some of the comps, it really excuse the numbers. auto makers in the spotlight today, especially ford. this is the second biggest automaker, and, of course, they reported a one cent loss this quarter, the first loss they had this year. but one of the things that ford also said, they are raising their annual forecasts, this after narrowing their third quarter loss to $25 million. they say because of surging earnings from their finance unit. remember, we just heard the same thing from g.m. yesterday. they are making more money in their finance units as opposed to their unit that actually sells cars. in g.m.’s case they made 19 times more money in one of their finance units that actually sells insurance and even refinancing mortgages, than the car unit. in addition to some of the cars, transportation, that was the biggest gainer in the s&p 500. you can see the s&p transportation index. northwest and continental, northwest the number four airline, it was higher, continental the number five airline, they both posted third quarter profits as they filled a record percentage of seats on their planes during the summer travel season. they were also able to sell those prices at nondiscounted rates as well. back to you in the studio.
>> deborah kostroun at the new york stock exchange. check out u.s. treasuries now. the 10-year and five-year notes moving lower on the day to the tune of a half point. 10-year yielding 4.46%, five-year yielding 3.4. on the short end also seeing losses here, three-year note yielding 2.39%, down 14/32, two-year note yielding 1.93%. a quick look at currencies here, this is where it stands as far as asia pacific trading. still to come, were the attacks on the world trade center one event or two? it’s a legal issue and a battle.
