Market briefing --- Mike (fast)
Nasdaq --- June (slow)
>> welcome back to “world financial report.” i’m michael mckee. recapping the day on wall street, a down day all around. the dow jones industrials finishing down almost .6% -- fannie mae saying that the securities and exchange commission is conducting a formal investigation of its accounting practices. fannie mae is the biggest financier of u.s. home loans and they said the s.e.c. has moved from an informal investigation to a formal investigation of the government-chartered regulators’ admission last month it wrongly accounted for hedging transactions on its $895 billion mortgage portfolio. the regulator of fannie mae, office of federal enterprise housing oversight said fannie mae used an improper cookie jar reserve and deferred expenses in order to meet executive bonuses. the s.e.c. now going to conduct a formal investigation of fannie mae. fannie mae shares trading down almost 3% in after-hours trade. the nasdaq closed lower for the first session in three. june grasso has details on today’s nasdaq trading at the nasdaq marketsite in times square.
>> insurers and health-related stocks led the nasdaq lower over concern from new york attorney general eliot spitzer’s widening investigation of the insurance industry. the nasdaq insurance index was the worst performing of the economic indices here. leading it down were safeco and cincinnati financial. in addition, healthcare equipment and services companies were also affected. two companies with the largest percentage declines on the nasdaq 100 were express scripts and first health group, a national health benefits company. technology shares rose, limiting the nasdaq’s retreat, after earnings at international business machines and texas instruments exceeded analysts’ estimates. the philadelphia semiconductor index closed higher for the third session in a row. 15 of its 18 members closed higher. level 3 communications was the top percentage gainer most of the day in the nasdaq 100, announcing two new contracts in the last two days. and robert mondavi rose after constellation said it was offering to buy it for $1.3 billion in cash. robert mondavi is the maker of lower-priced woodbridge wines. the $53-a-share offer price for mondavi’s publicly traded class a shares represents a 33% premium over yesterday’s closing price and the offer includes a $61.75 share payment for shares controlled by the mondavi family and assumption of $333 million in debt. ameritrade holdings, the biggest discount brokerage, said fourth-quarter profit rose 3.8%, $57 million, as they cut costs to compensate for a drop in trades. that also traded higher today. i’m june grasso, bloomberg news, at the nasdaq marketsite.
>> ford shares fell today as the nation’s second largest automaker reports a $266 million quarterly profit led by earnings from auto loans rather than auto sales. ford’s automobile operations reporting its second straight quarterly loss. deutsche bank’s michael caster in says “profit is profit” and is pleased with the earnings. if you back out expenses of closing a jaguar factory and writedown related to an investment in ballard power systems, ford’s earnings came to $537 million or 28 cents a share. on that basis, third-quarter earnings exceeded the average estimate of analysts surveyed by thomson financial. don leclair, ford’s chief financial officer, says north american auto sales are on the mend. the company is introducing new models in the fourth quarter and raising its full-year forecast.
>> what you can expect is that this year we will earn about $1 billion pretax on our automotive operations, a big improvement from last year. $2 to $2.05 per share for the total company excluding special charges and we’ll go into where we think we’re headed for 2005 in january of next year.
>> kevin tynan of argus research, who has a hold rating on ford, says some investors are focused on the auto operation’s pretax loss of $609 million excluding costs. he says that’s one reason shares of ford and rival general motors, which last week cut its profit forecast, are trading lower. shares of altria ended the day unchanged after bouncing between gains and losses. its cigarette business is improving but there are problems at the kraft food subsidiary. altria’s net income grew more than 6% to $2.65 billion or $1.29 a share. altria cut prices on the top selling marlboro brand to win back business. the outlook at different at kraft, 85% owned by altria, kraft cutting its 2004 forecast for the second time in three months, saying costs are rising for food ingredients and marketing . also today, altria’s philip morris unit along with other tobacco companies won a court ruling. new york’s highest court saying a $17.8 million verdict awarded to the blue cross health plan was incorrectly based on state consumer law and may lead to the verdict being overturned. sovereign bancorp out with third-quarter numbers. you’ll hear from c.e.o. jay sidhu has to say about his company and industry here, before anywhere else, joining us next.
