Market briefing --- Matt (slow)
NYSE --- Bob (fast)
Conference --- Peter (slow)
welcome to “world financial report.” i’m matt nesto. the top story of the day, oil and gasoline futures both up strongly. this after a weekly report from the department of energy showed that gasoline inventories rose less than expected by some analysts. crude oil for june delivery up 96 cents or 2.4%, closing at $41.50 per barrel. prices up 44% from a year ago and 25% in the second quarter alone or from april 1. gasoline meanwhile for june delivery up more than six cents. that works out to $4.5%, closing above $1.45 a gallon. that’s the highest price ever since the contract began trading in 1984. it is 70% higher from a year ago. oil prices jumped to a record in new york on monday when global economic growth forecasts came out that were showing an increase in demand for fuel at a time when supplies are low. plus, there’s concern that terrorist attacks in the middle east could disrupt reports. well, let’s take a look at closing numbers here today. the dow, s&p trading lower as we said, erasing gains. nasdaq erasing gains, managing to come through with a positive finish on the day. but barely changed. as we look at volume here today, 1.5 billion on the big board. onto the bond market we go. nasdaq volumes also there. 1.8 billion. we saw in the bond market here today some weakness. really little change to speak of. yields inching higher right on down the line. 10, five, three, and two. we’ll take a look at latest trade in the currency markets . no surprise. it’s early. but the dollar was down across the board. three uncles right in a row, right before your eyes. bob bowdon at the big board now with a wrap of the action that was really interesting in the final two hours of trade. what happened?
>> indeed, matt. final numbers really belie the volatility. people who may read the paper tomorrow and say the dow was down .3%. they’ll miss the fact it was up 1.25% earlier in the session. concerns, you ticked off a couple of them already. oil at over $41 a barrel, near the all time high. not to mention, by the way, natural gas at $6.50 per million b.t.u. interest rates a concern. yield on so the-year treasury increasing for the second consecutive day. hurt home builders. concerns of iraq also with the u.s. army specialist sentenced for abuse of inmates but also agreeing to testify against other soldiers as part of a plea bargain. concern that there may be more bad news on that front. let’s take a look at defensive stocks. we’re not so defensive today.medical stocks down.king pharmaceuticals down for the third session. cardinal health agreed to buy alaris medical systems. down by a half percent. also boston scientific and schering-plough. cardinal down for the fourth consecutive session. consumer staples down as well. safeway down for eight out of the last nine sessions. coca-cola was the second worst performing dow industrial stock on the day. h.j. heinz and altria down. higher yields on so the-year causing people to think mortgage rates will move lower. there’s the overall index for the s&p super composite homebuilder index. we see that hovnanian was down about 1.9%. that was after an analyst upgrade by csfb to neutral. c.e.o. of hovnanian saying interest rates weren’t a concern. also all these others―toll brothers, lennar, beazer and centex―down over 2% on the day. we did have rallying stocks like hewlett-packard. that was lost in the other news. back to you.
>> no question, bob. thanks very much. also out today in terms of news, intuit shares now falling in after hours trading. the software company announcing its sales in the current quarter will miss analyst expectations. intuit is the world’s biggest maker of tax preparation software. the company says the revenues will miss the average estimates of $283 billion. for the quarter that ended last month, earnings fell to $1.33 a share. the april quarter is the most important for intuit because guess what, it includes tax season. in a separate announcement, intuit says it will buy back $500 million worth of its own shares. workers at s.b.c. communications are calling a four-day strike starting on friday. the union represents 100,000 employees and they have spurned the company’s latest wage offer. workers will walk off their jobs in 13 states from california to connecticut, returning on tuesday. the sides have been sparring over health care expenses, wages and job security since february. the verizon strike in 2000 cost the company $30 million to $40 million in lost revenue. top executives in the mutual fund industry meet in washington this week. this year’s annual conference of the investment company institute comes as state and federal regulators continue their probe in to that multi-trillion dollar industry. bloomberg’s peter cook in washington where he always is with more on the conference. peter?
>> matt, this conference comes at a difficult time for the mutual fund industry. after largely avoiding any hint of a major scandal during the course of its 60-year history. the last 10 months very different. mutual fund business has been hit hard by scandal amid allegations of late trading and market timing and suggestions of special treatment for some large investors. more than 30 fund companies are under state or federal investigation or have started their own internal probes. more than $2 billion in sanctions levied. more than 80 industry executives have lost their jobs. during his opening comments to this conference, the chairman of the i.c.i. addressed the scandal and told the 1,500 members or so that the repercussions have not been completed.
>> well, questions certainly can be raised about the fairness of criticizing the many for the actions of the few. there can be no quarrel about one thing. collectively we have no one to blame but ourselves for triggering the note right we received and the criticism we heard.
>> the scandals are dominating the agenda at this conference. round table discussions focused on restoring investor confidence and discussions of reforms adopted by the s.e.c. and those that have are in the discussion stage session. this afternoon focused on a new requirement that each fund get a new chief compliance officer. acknowledging that the scandals have taken a toll, participates today have stressed that the abuses uncovered should not tarnish the whole industry. here’s vanguard’s chairman and c.e.o.
>> the implication that somehow there was this broad secret that everybody in this room knew about is not real. it’s not real nor is it fair i don’t think.
>> the i.c.i. has supported many of the s.e.c. reforms currently under consideration. but there are a couple that the i.c.i. has fought. two came up today among participants. one, fund board chairmans be required to be independent. the suggestion that that may do more harm than good. another proposal that portfolio managers disclose their compensation publically. the suggestion here, matt, is that the managers might choose to go onto work in other forms of money management if they have to face that form of scrutiny with the mutual fund industry.
>> appreciate the update. conflicts in those oil numbers out today. that is we had the government report from the department of energy and at the same time we get the industry report from the american petroleum institute. those numbers from the a.p.i., as we call it, oil and gas both rose. the department of energy report showed that oil was down by about a million barrels while gasoline rose by about a million. the net result, though, from both survey sincere that oil inventories in the u.s. now stand very, very close to about 300 million barrels.this is the two side by side. this is d.o.e., department of energy data. white line is crude. you can see the rise, the rally in the inventories of crude over the past―since january actually of this year. at the same time, you can see gasoline rising, falling and coming back again during that period of time. also worth noting, this is a 13% increase from the bottom on the price of crude or on the inventories of crude rather. and last but not least, we are talking about opec meeting and raising their production. just to let you know, their production quota now at 23.5 million. they’re exceeding that in reality by 20%, producing about 28 million. increase of the production probably having little effect. we’ll talk to the chief equity strategist at sanford bernstein, next. he will tell us what he likes out there.
