Market briefing---Matt (slow)
NYSE---Ellen (slow)
Nasdaq---Julie (slow)
View---Su (fast)
welcome to “world financial report.” i’m matt nesto. our top story today, the world’s biggest importer of u.s. beef says its imports of the meat and process products that it contain―that contain u.s. beef will be banned. japan is taking that action now that a lab in the u.k. has confirmed that one cow in washington state, did, indeed, test positive for mad cow disease. japan’s government also plans to ask retailers to recall certain products containing beef as an ingredient that may pose a health risk. a restaurant trade group in japan estimates japanese restaurants may start running out of u.s. beef in about a month. meanwhile, the u.s. will almost double the number of cattle inspections. that word comes from the u.s. department of agriculture, news that japan and the next two largest u.s. beef importer, south korea and mexico, are suspending imports sent cattle futures plunging by the maximum amount that the chicago mercantile exchange allowed on that particular contract, which is 3%. stocks did rise in today’s trading, making it five straight weeks of gains for the broader market. the s&p 500 and the dow average had their fifth straight weekly advance. let’s check in with ellen braitman at the new york stock exchange for details. ellen?
>> well, matt, one thing that helped today was steel companies. china removed import tariffs on some steel products that lifted shares of nucor and u.s. steel. the s&p materials index added .8%, the biggest gain we saw today in the 10 broad industry groups that make up the s&p 500. take a look at some of the specifics. u.s. steel advanced. we brought up a five-year chart. take a look. also in focus today, the continued impact of this first case of in the u.s. of mad cow disease. shares of some biotechnology companies involved in livestock testing rising for a second day after a cow in washington state tested positive for mad cow disease. biorad laboratories that makes the top-selling test for the disease gained more than $2 a share. and abbott labs also sells a mad cow disease test. the company already markets the product in japan and europe with an irish partner. it is under review for use in the u.s. you see the shares pretty close to unchanged today. tyson foods continued to decline. it was down 31 cents. morgan stanley cutting the rating on the company to equal weight from overweight. keep in mind, the u.s. department of agriculture today said consumers should be confident about the safety of beef. mcdonald’s gaining half a percent today after it slumped 5% on wednesday. it’s been trying to reassure consumers that the food is safe. wendy’s also gaining .5% today. matt, back to you.
>> ellen, thanks very much. julie hyman as details on today’s nasdaq trading from, where else, the nasdaq market site, and where else, times scare.
>> where else? here i am, matt. and just to give you an idea of how the session ended the day, up about .2%. you were talking about volume a few minutes ago. we did have the lightest volume on the nasdaq in about a year since christmas eve last year. it was about 30% of the six-month daily average in today’s session, the third week that the nasdaq rose, about 1% higher. just to give you a couple of the big story stocks on the nasdaq today, amazon coming out saying it had its biggest holiday season ever, just about .25% pop-up in the shares, also the sharper image, another retail e of course, had an 8% rise in its shares today after it boosted its fourth quarter and full-year profit forecasts. but i also wanted to talk a little more about mad cow. we saw a lot of the stocks that were active in wednesday’s session when those first reports surfaced were active once again. in fact, they saw gains once again. these are all biotechnology companies. orchid biosenses makes a test for mad cow-like disease for the disease in sheep. strategic diagnostics a fractional gain and also makes a test for mad cow disease, and v.i. technologies makes a compound that may remove preon proteins which cause mad cow. all of those stocks higher. these are some of the steak house shares that trade on the nasdaq. finally, just wanted to quickly touch on critical path. this company may be going out of business according to its auditor. it dropped 23% in today’s session. pricewaterhousecoopers saying it has recurring losses, a lack of capital, and may not be able to continue as a going concern. back to you.
>> julie hyman, thanks as always. well, three trading days left, folks, and the s&p 500 up about 25% this year. the nasdaq approaching a 50% gain. where have all the brown bears gone? su keenan has been looking into that story and joins us now with more.
>> they’re still out there but some will admit they have softened their voices during the rally that has run since early march. steve lehman from federated investment management proudly calls himself a bear.
>> i think that the policies particularly at the fed have simply postponed the resolution of the imbalances that have built up in the last half of the 199’s.
>> well, lehman remained critical of u.s. fiscal and monetary policy. his main concern―today’s economic growth is being achieved through an enormous increase in national, corporate, and consumer debt. this mean, he says, the economy is far weaker than many investors believe and he expects stocks will drop to reflect that. that’s also why the bulk of his investments are outside the u.s. stock market. this year he achieved greater than 20% gains for his mutual fund clients through investments in international gold stocks and non-u.s. treasury bills offering higher interest rates and currency gains. in the past three years, lehman’s averaged gains of more than 12% for his clients and hid advice to his institutional investors in the heavily invested u.s. stock market, proceed with caution, he says.
>> some of the wisest investors over the decade are perhaps more worried than they’ve been at any point in their investment lives. people like john timpleton, warren buffett, george soros, jim rogers, jeremy gransome have said this is the biggest sucker rally of all time, and i have a very high regard for all of them and think they’re more likely to be right than the cheerleaders.
>> beware the cheerleader, steve lehman says. in recent wikes, several investment strategists have cautioned investors that the market may be due for a correction. redwood’s kevin lane who studies patterns in the market says there are several indicators suggesting the market is about to correct by 5% to 10%. he says the vix is at the lowest level it has been since just before march, 2000.
>> the idea that we would suggest is the lower the vix goes, the greater the increase or the greater the risk for a correction.
>> and lane also says if the s&p falls below 950, he believes the market could be due for a correction greater than 10%. interesting to watch as we start the new year. mark? matt? back to you.
>> matthew, mark, matt, john, they’re all here. our next guest recently did an exchange, if you will, on the holiday season, tradesing in some of his retail stocks for generic drugmakers. he’s the chief investment officer at philadelphia trust and he’ll join us next. richard sichel will be here to tell us what he’s buying and why.
