Market briefing --- Matt (slow)
NYSE --- Deb (fast)
Nasdaq --- Julie (slow)
welcome to “world financial report.” i am matt nesto. coming up in this hour of “world financial report,” joining us for the g-8 summit in sea island, georgia, will be frances townsend, homeland security adviser and christian forbes, a member of the president’s council of economic advisers. we said the greenspan effect was felt throughout the markets and i’m talking about stocks, bonds and currencies. the fed chairman says the central bank is ready to raise interest rates and would pick up the pace if flation exceeds the fed’s forecast. stocks opened lower after the chairman’s remarks in london but gained as oil prices fell throughout the day. let’s bring you the closing numbers, easier to follow that way. half a percent higher for the do, the s&p little changed but that’s off of trading lower most of the day and the nasdaq little higher but it goes into the record books as a green arrow day. volume -- greenspan spoke after he spoke, the yield on the treasury notes due in two years, the most sensitive to expectations for monetary policy, those yields rose to their highest level in two years, july 2002. checking on the bond market , you can see declines there pushing the yields up across the board but the percentage moves in the bond market muted. greenspan’s remarks also provided sustainance for the dollar, rising the most against the euro in three weeks and advanced also against the yen and pound. in my neighborhood, that’s called across-the-board gains for the greenback. also buying more yen, and the euro and pound trading lower versus the dollar. traders expect the department of energy to say that crude oil inventories rose last week, that sent futures lower today for the fourth session in five. the price of crude oil in new york settling down 3.5%. analyst at bear stearns predicting that prices could fall to $20 by early next year. the price of gold also fell about .7% here today and this after chairman greenspan said the fed is ready to stem inflation. futures slipped, as you see, to 391 an ounce. comments sent the dollar higher, reducing the metal’s appeal. investors need to point out that gasoline also down 3.5%, it down 18% this month. on that drop of crude and gasoline, a major impact on the stock market . deb kostroun has a wrap from the big board.
>> we did see stocks rising on below-average volume here at the new york stock exchange. we’re looking at nine days in a row of below-average volume. and crude oil closing at that six-week low, impacting the upward movement from the last hour for stocks. the other big story on the day as greenspan suggested that the fed will raise interest rates sooner than expected, traders focused on that, leading interest-rate-sensitive stocks to decline. over the past five sessions, crude oil has lobbed off 12% on expectations of rising inventory, something we’ve been hearing for several weeks, likely to get that confirmation in the energy report tomorrow. opec announcing last week all of their increases in their production levels. looking at the energy stocks, holding up quite well and then in the last hour really seeing a dropoff and many of the energy stocks, by the closing bell, ended up being the worst performers in the s&p 500. on the flip side, many of the transports performing well and airlines doing well with the huge drop in crude oil. crude oil was sitting around $42 a barrel. crude oil now after the close of trading at $37 a barrel, so, that, a real big decline. interest-rate-sensitive stocks that were also lower on the s&p, along with energy, you had real estate, also utility stocks, some of the worst performers in today’s session. along with the homebuilders, some of the other consumer durable goods closed lower, as well, so it was a day we were focusing in on oil and interest rates. once again, something that the market is consumed with right now. matt, back to you.
>> absolutely, deb. thank you very much for that. one of the groups, two of them, in fact, that were really hard-hit to today were the homebuilders and furniture makers. they were the worst performers in the s&p supercomposite index, the combination of the s&p 400, 500 and 600. this is the furniture makers and homebuilders versus the s&p 500 since march 5. the yellow line on the top is% the s&p 500, it is down 1.2% over the past period of time since march 1. the orange and white lines beneath that, homebuilders in white and furniture makers, down about 14% a piece. both on the same day hitting an all-time high on march 5. what happened march 5? i have the courtesy of the bloomberg terminal, we had the february non-farm payroll data out coming in much worse than expected, sending bonds plunging and yields rising. looking at their performance today, all but one of the homebuilders falling on the session today. you can see 3% to 4% declines for some of the big names. 3% declines also, kind of breathtaking here, folks, for the home building stocks, 15% to 20%. also worth a peek, the estimated p.e., forward p.e.’s, in other words, 7.5, eight times estimated earnings and book values at two times, both at a huge discount to the s&p 500. s&p at 17.5 times estimated earnings, more than double. transportation stocks helped the nasdaq hang on to a late-day rally, pushing it higher at the close. julie hyman was there for it with this wrap from the market site.
>> oil prices again affecting trading today. especially as we headed into the the end of the day’s session and end of the commodity trading session as we saw oil and gasoline prices both drop off. transportation stocks, in particular, doing very well and that helped push the nasdaq higher by the end of the session, although really just barely, up .1%. still remaining above that 2000 level which yesterday we crossed over for the first time since late april. talking about some of the transportation stocks and transportation index, the biggest gainer within the nasdaq, of about 1.33%. we saw various types of transportation stocks gaining, stocks like jetblue which placed a big order for a number of airbus planes, trucking companies, yellow roadway and freight companies like c.h. robinson, all gaining today. on the other hand, however, we had various story stocks, smaller story stocks today that weighed on the nasdaq. one of the most interesting to come out today was tivo. the company said there was speculation earlier in the day that directv was selling its stake and directv confirmed it was selling 3.4 million tivo shares following on the heels of the vice chairman of directv resigning from tivo’s board last week so there was concern that partnership might be in jeopardy. directv says it will continue their partnership with tivo, however, tivo shares down by the end of the session. take 2 2 interactive―take-two interactive saying losses coming in wider than expected and it delayed the release of its “red dead revolver” video game.
>> still more to come in the “world financial report.” our next guest says that stocks will resume their slide. equity strategist with brown brothers harriman will join us live.
