Market briefing --- Bob (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
Crude oil --- Greg (slow)
>> welcome to “world financial report.” the economy grew in the second quarter. that topped consensus estimates but was down from the previous forecast. economists were expecting the figure to be scaled back from the second quarter growth figure of 3% largely because of high oil prices and the impact that had on trade in the second quarter. the headline number of 2.8% was just above the bloomberg survey forecast of 2.7% and followed the 4.5% pace of growth in the first quarter of the year. treasury secretaryy john snow described second quarter numbers as a pause.
>> we did see a pause. in the second quarter. we still see the underlying strength in the economy. low inflation, high productivity. unemployment rate falling. and continuing pickup on jobs.
>> considering that oil prices had moved so much higher in the second quarter from the first, many economists were satisfied with the numbers.
>> i think that a couple weeks ago starting to talk completely the opposite of the few months earlier about a serious downturn in the economy is greatly exaggerated. the u.s. economy is absorbing some fairly significant issues here with the energy supply shock and these prices. and i think that we’re growing at least at a trend pace. >> next week we’ll get some new monthly data on monday. we’ll get some personal income figures for july. and then friday, a week from today, brings the august jobs report. stocks advanced on the day. oil prices may have brought the market down too much. let’s get to the numbers. we see green arrows across the board. the dow up about .2 of one percent. and the nasdaq composite up about .5% on the friday trading. volume at the big board. the lightest volume of the year, 850 million shares traded. advancers beating decliners. nasdaq just over a billion shares traded. and there also advancers beat decliners. the nyse composite index up .2%. the amex up .6%. and the russell 2000, the best of the group so far, up .8% in friday’s trading. the broadest look of the u.s. markets , the dow jones up 1/3 of 1% on the day. oftentimes when stocks rally treasuries fall. that was the case on friday. treasuries fell for the first day in four on the economic data.the 10-year note down. the yield up to 4.23%. five-year fell 3/32. the two-year, we see it fell 1/32 and the yield at 2.49%. for more on today’s trading action we now go to our julie hyman coming to us from the big board.
>> the s&p 500 and dow both rising in today’s session capping off a week of gains. the s&p 500 up about .9 where as the dow gained about .8. it was the third straight week of gains for both indices. that said, very low volume this weekend. low volume today in particular. it was about 800 million shares traded, the lowest volume of the year. and the first time this year that we’ve traded fewer than one billion shares. in today’s session it was the semiconductor shares that did the best, best performing group wise. they had declined in yesterday’s session but rebounding today. advanced micro devices, national semiconductor, some of the best performers there. pharmaceuticals doing well in today’s session. the second best gainers within the s&p 500 there. it was bristol-myers squib. king farm suitals wells watson pharma doing well. we did have one group dragging within the s&p 500. the airlines were declining in today’s session. this was after american airlines said its 2004 cost projection will be $1 combl higher than last year because of rising prices. and, indeed, higher than its own previous forecast. this sent down the other airlines stocks as well. some index changes within the s&p. coach will be replacing charter one financial in the s&p 500. and in turn, urban outfitters will take coach’s place in the mid cap 400’s. we’ll be watching those to take effect after the close of trading on tuesday. i’m julie hyman with bloomberg news from the new york stock exchange.
>> thank you. the nasdaq also finished the week higher. our june grasso has details from the nasdaq market site.
>> semiconductor equipment makers gained after their drog yesterday. some of the leaders, novellus, which did not lower its profit forecast as some investors had expected. novellus whose equipment built circuits and computer chips said third quarter revenue will be $412 million in keeping with its forecast range. also leading k.l.a. and applied materials after jefferson company raised its rating on the stocks. k.l.a., the largest maker of inspection equipment for chips, was upgraded to buy from hold. and deutsche banc also initiated coverage on the stwock a buy rating. applied materials, the world’s biggest maker of semiconductor production equipment was raised to underperform from hold by jeffries. tech data, the number two distributor of computers and related parts increased after reporting better-than-expected profit and revenue. the company said it second quarter net income of 52 cents a share on revenue of $4.58 billion. the average analyst estimate was 49 cents a share. one of the worst performing tech stocks after the company cut its 2005 sales estimates from the second quarter from $70 million from a previous forecast of delb 70 million to $82 million. it also withdrew its 2005 profit forecast. j.p. morgan securities cut this stock from knew the trool overweight. a maker of digital video recorders that can pause and replay live television, tivo, said it expects revenue this quarter from about $27 million to $28 million. the average analyst estimate was $29.5 million. june grasso, bloomberg news at the nasdaq marketsite.
>> concern about oil supply disruption because of political unrest are easing. iraqi oil exports from the persian gulf were close to their normal levels in oil ministry official said. and convenient zaillian exports remained steady since president chavez’s victory in a referendum recall vote. crude oil set new highs as it rallied back in the first three weeks of august. but since peaking at just below $50 a barrel the futures dropped below where they started the month. expectations are oil prices will fall further.
>> with the decline in oil prices in the past week, it’s been dramatic. only by up to 13% at one point. by $6 a barrel. traders and analysts say prices could fall further over the next week, according to a sure have a by bloomberg news. analysts and traders say prices will decline. 43% say they will rise. 7% are neutral. a week ago only 24% of those surveyed said oil prices would fall. now treasury secretary john snow echoed those sentments today telling business leaders in michigan saudi arabia is willing to raise output to 10.5 million barrels per day.
>> the fact that the supply is there. with it not a huge cushion but enough cushion on current demand levels makes me think that these prices can’t be sustainable.
>> with the optimism driven by several factors. yukos oil of russia said it will increase shipments this year though at a slower pace. also iraq raised oil exports. and the u.s. reached a peace accord with shiite leaders in iraq reducing the threat to oil facilities there. even with these price declines, oil is still selling at historic highs. 38% higher a year ago. david briggs says that reality doesn’t bother many stock investors at all. in fact, briggs says the stock market ‘s toleration for high oil prices is higher than a year ago. today he says oil prices could range from $36 to $42 a barrel and stocks will still perform well. back to you.
>> thank you. in friday trading nynex crude oil futures were little changed. alan greenspan says time is running out for the u.s. to make what he calls increasingly stark choices as baby boomers retire. the fed chairman says retirement benefits under social security and medicare may be more generous than the u.s. economy is fund. he says changes must be made before the baby boom generation retires.“if we delay, the adjustments coob bankrupt and painful” greenspan told a central bank conference in jackson hole, wyoming. after break, the u.s. grew at 2.8% annual rate last quarter. up next, the outlook for economic growth in the united states.
