Nasdaq --- June (slow)
Asia Pacific market --- David (slow)
>> the nasdaq two-day drop of 3.1% is the largest in five month. june grasso filed this report from the nasdaq market site in times square.
>> iver economic group on the nasdaq ended the day lower with technology shares leading the decline. analyst downgrades began the drop in computer share. dell the biggest drag on the nasdaq computer index after the biggest maker of personal computers was cut to outperform from strong buy by raymond james on valuation. share of dell had come to within 10% of analysts target price. sun microsystems, which led the nasdaq lower yesterday after a downgrade from sanford bernstein is the worst performer of the nasdaq 100 percentage after a merrill lynch analyst lowered the fiscal first quarter revenue estimate. he reduced the earnings estimate by one cent to two cents a share. and amazon.com also one of the worst performing stocks on the nasdaq 100 by percentage. at the world’s biggest internet retailer was reduced to sell from hold by analysts at citigroup smith barney on concern the company may see limited margin expansion and lower north american sales growth than the competitors. it led internet shares down. monster worldwide t owner of the most used internet site for employment advertising was cut to hold from buy by american technology research, google, yahoo, ask jeeves all down. not all computer shares did drop, however. microsoft advanced after j.p. morgan raised its second-quarter earnings per share target for microsoft 3% to 34 cents saying the company will benefit from an improving software spending environment and apple computer was one of the best performers on the nasdaq 100 after j.p. morgan analyst raised the first-quarter earnings forecast. i’m june grasso, bloomberg news, at the nasdaq market site in times square.
>> new zealand stocks rise on the first day of trading this year, setting records along the way. for the latest market action, we go to david tweet in sydney. david, what is behind the gain we’re seeing this morning in the new zealand market ?
>> it is actually the eighth straight gain for the new zealand top 50 there or gross 50. and it’s also trading at a record, but you have to remember that’s a small market and it is really dominated by a single stock. that stock is tell com new zealand or telecom corp. of new zealand. it has been increases the dividends and that is one of the reasons we’re seing that stock rise 6% in the last seven days. people have been coming whack back to the dividends. that said, though t new zealand economy is in pretty good shape. it is expected to expand by 4.5% in 2005. sorry, that is the year ending on march 31. and that’s actually faster than the 3.8% increase that analysts or economists surveyed by bloomberg had forecast back in september. so that’s really the story behind the u.s. market . also one other point is the u.s. dollar has been rising against the new zealand dollar, and that does make new zealand stocks cheaper to buy for u.s. investors and new zealand telecom corp. being such a big company in the index is one they tend to go for particularly with the dividend yield. cathy?
>> the australian stock market closed at a record yesterday. how are they expected to open today?
>> not such a rosy picture today. the index futures are down around about 0.7%. the new york a.d.r.’s were down around 2% or 1.9% which is the biggest drop since the beginning of december. the story behind that is the decline in metals price. remember, there is a preponderance of australian mining companies in the a.s.x. 200 that represent about 19% of the index. we saw copper prices sliding almost 9% in new york last night. that was from a 15-year high, i might add. we also saw aluminum prices declining. the reason those prices are declining is because of the increase in the u.s. dollar has created concerns that there will be lower demand for the metals which are all priced in u.s. dollars. and also concern that during 2005 we’re going to see slowing demand growth in china. remember that barclay’s capital in december said it expects china demand growth for copper to slow to about 10% from 15%. so watch out for companies like rio tinto and companies like b.h.p., of course, phelps dodge in the united states, the world’s second biggest cop prore -- copper producer and the shares dropped 3% in overnight trading. on the upside, though, the decline in the australian dollar against the u.s. currency might be good news for some of the australian exporters or companies active in the u.s. look at news corporation whose shares did drop 2% in u.s. trading and companies such as computer serve and westfield group. back to you, cathy.
>> thanks for that, david. after the break, manufacturing activity in singapore accelerates in december. the head of research will deliver the outlook for the economy and markets next.
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Listen Market briefing --- Cathy (slow)
Inflation --- Susan (slow)
Tokyo market --- Ron (slow)
earthquake and tsunami. powell and florida governor jeb bush are in jakarta ahead of tomorrow’s summit of asian leaders. the dollar rises the most in more than half a year against the euro and yen. stronger orders of u.s. factories helped the dollar release the recent decline. u.s. stocks fall after comments from the federal reserve show policy makers believe rates are too low to contain inflation and rising prices may curb economic growth. the nasdaq dropped to the biggest two-day loss since august. and japanese car makers win u.s. market share from detroit’s big three. toyota, nissan, and honda report december sales rose more than 20%, while general motors declined. toyota also became the first foreign car maker to sell more than two million vehicles in the u.s. in one year. a jury convicts cendant’s former vice chairman kirk shelton of 12 charges including fraud and conspiracy. the same jury says it could not reach a verdict on 16 charges against the former chairman walter forbes. they were accused of trying to inflate earnings before the company was bought out by h.f.s. in 1998. cendant was created out of that merger. cendant shares are still trading below the price on the day the merger was completed nearly seven years ago. the company controls franchise brand names including avis, ramada hotel, and century 21 real estate among others. the u.s. federal reserve says interest rates are still too low to keep inflation stable. minutes of the fed’s december 14 meeting show that policy makers are concern that rising prices may become a risk to growth. for more on what hah means for the u.s. economy and global growth, we’ll speak to susan gossling. good to see you. what do you make of the fed’s comments on inflation?
>> i think the fed is exactly right. interest rates in the united states are relatively low compared to inflation. the fed is being quite slow during this growth cycle to raise interest rates. maybe a little bit behind the curve and i think it’s encouraging we’re seeing they’re continuing to move towards the normalization of rates.
>> now, consensus among economists and the bush administration show u.s. growth this year to be about 3.5%, which is lower than last year’s. what is your own forecast?
>> well, we always see that there are a range for potential outcomes for growth and we like to take into account a range of possibilities to get a robust outcome from the investment strategy for investors. however, what we can see for the u.s. is savings rates and particularly household savings rates are relatively low and at some point they will need to increase and when they increase, growth will be slower in the united states. that may or may not occur this year. expectations are that it would during 2004 and didn’t come through. as time goes on, it does become more likely. at some point we will see a period of slow growth in the u.s.
>> what about for china? we have some economists not ruling out the possibility that china may be headed for a hard landing. do you think that’s likely?
>> well f you go go about a year ago, industrial production running 20% and there were lots of fear of hard landing. what we have seen since then is well managed policy responses from the government that’s taken industrial production reading now down to below 15%. really some very judicious management of policy there is that has significantly reduced the risk of a hard landing in china.
>> central bankers there are gathering for the annual meeting this week. are you expecting any significant announcement from them, especially on the revaluation of the chyneeze currency?
>> well, china has been under some pressure particularly from the u.s. who sees the currency as being undervalued and that giving them an unfair competitive advantage. so it’s possible we may see some adjustment, perhaps a staged series of adjustments or even possible at some point we may see a repegging with the basket of currencies to pat that. and the issue is a revaluation will result in less job creation in china and that may be politically unacceptable. it’s by no means clear what we’ll see.
>> amidst the uncertainties that you have mentioned, you stress on the importance as having a diversified portfolio for the investors. what are you telling the clients now?
>> well, what we’re telling clients now is we’re in an uncertain environment and that needs to be taken into account. now, that is always the case, but i think there is proof of unl usually high level of uncertainty and if you try to bet on a particular scenario ocurg, chances are you will be wrong. you need to diversify the portfolio and that will protect you against the possibility of a range of different things happening. and it really is what underpins the achievement of long-term financial objectives.
>> got to leave it there. thank you for that, susan. susan gossling of m.l.c. in sydney. in news outside the business world, the effort to help those devastated by last week’s asian earthquake and tsunamis tops the world news. ron madison has that story and more in tokyo.
>> the united nations and other aid groups are using as much as $3 billion pledged to tsunami victims. many of the bottlenecks are starting to clear up and more aid is reaching some of the hardest hit areas of indonesia and sri lanka. in sri lanka, nearly 200 u.s. troops are now on the ground there. associated press says the u.s. plans to deploy about 1,500 marines as well to the country. british military support has also arrived. a military spokesperson said it was important to assess the need before rushing in to help.
>> we think this is important. i think it’s important to identify what specific tasks we could add value in before we start throwing capability forces into the area and almost contributing to the problem rather than attempting to solve it.
>> meantime in indonesia, a plane chartered by the united nations high commissioner for refugees arrived at the airport in jakarta on tuesday morning. it was carrying 92 ton of blankets. the u.n. says it has the use of 40 helicopters for aid delivery. american helicopters are v also been carrying water, biscuit, and other bare necessities to ravaged indonesian communities. the red cross says the death toll in indonesia alone could surpass 100,000. insurgents ambush and kill the governor of baghdad province. the governor hadari was killed as the convoy passed through baghdad’s northern neighborhood. six of the bodyguards were also killed in the attack. the governor was reportedly riding in an armored car. the killing is one of the highest level assassinations since interim iraqi government took power. al-hadaari was the attempt of a failed assassination attempt last year. secretary of state colin powell says the killing shows insurgents are determined to try to stop the january elections. cathy, that is the latest look at world news. back to you.
>> thanks for that, ron. and coming up, computer-related shares lead the nasdaq lower. a report from new york will wrap up the day’s trading action.
