Energy bill --- Lizzie
>> as fuel prices have risen on the perception of tight supply, the industry is looking ahead to the summer driving season and freepg implement changes laid out in last year’s energy bill. bloomberg’s lizzie o’leary has more from washington.
>> last year’s $3-a-gallon gas followed in the wake of hurricane katrina. this year.
>> automobile for a number of other reasons we’ll have the potential to continue to have that in 2006.
>> record crude prices, decreased refinery capacity and the switch to ethanol as the most common gasoline additive have industry worried that rising costs will be carried to consumers.
>> the ethanol switchover is a huge challenge to the industry because when you blend ethanol and gasoline, you have to change the base gat to a much -- gasoline to a lower evaporative base content.
>> the switch is less than a month away.
>> congress imposed this legislation and forced us to deal with it against our advice. so going forward, we’re going to work as hard as we can to get the products to consumers but it’s an enormous challenge.
>> one energy department report raised concerns of supply disruptions, though ethanol advocates dispute that. high energy prices continue to be on voters’ minds in the months before the midterm election. in one recent poll, 58% of respond ends approved from the administration’s energy policy.
>> it’s an issue for everybody in washington. this is a nonpartisan issue.
>> and congress is taking other steps to address rising prices. senate judiciary chairman arlen specter has introduced a bill he says would lower prices by toughening antitrust enforcement against oil companies. lizzie o’leary, bloomberg news.
>> tomorrow, the energy department releases its fuel price outlook for the summer. we have breaking news, now, after the bell, alcoa releasing its first-quarter numbers. the aluminum maker came out with earnings per share 51 cents -- i’m sorry, that was the estimate. their number, 70 cents a share, the operating number. so beating the street by a significantly wide margin. revenue also topped forecasts, $70-- $7.21 billion against the estimate of $7.5 billion. we will continue to digest the numbers from alcoa just out and pull an analyst―i’m sorry, shareholders, portfolio manager with u.s. global investors, in just a moment. we want to move on and talk about enron. after 11 weeks at the trial, former enron c.e.o. jeffrey skilling took the stand in his own defense. continuing to maintain his innocence regarding all wrongdoings, joining us live from outside the courthouse in houston, june grassoment what’s the latest?
>> when skilling took the stand, he said he was a little nervous because he realized his life was on the line, as he testified, despite the fact that he knew he was innocent of all charges. his attorney asked him why he never made a deal and he said despite the fact that he saw colleague after colleague make plea agreements with the government, he wasn’t going to make a deal. he said the vast majority who of tified here are not guilty and the charges against me are wrong. he explained his connection to enron. the vast majority of his professional life was spent at enron and he said he left because he was burned-out and when he left enron, he believed it was financially in sound condition. it was only when he began to see the articles in the papers about off-the-books partnerships by andy fastow and about the losses of enron that he began to question what had happened and he offered to return to enron to lend his credibility to the situation but he was rebuffed by the people at enron. but he said when enron tapped $3 billion from its bank line, he knew the end was in sight. this company “had been my life. it was devastating not to be able to do anything.” he talked about a time when he began drinking, he cried, he couldn’t get up out of bed, he was so distraught. his attorney tried to show in several ways that skilling had the mindset of an innocent person through this, not destroying documents or computers or hide his money off shore and when he was subpoenaed to testify, unlike ken lay or andy fastow, he didn’t take the fifth amendment and his attorney showed a stack of papers of all his testimony before various groups. back to you.
>> thank you so much for that. we want to recap for you the latest earnings numbers from alcoa. alcoa kicking off the latest earnings season, the first dow component to report. topping analysts’ estimates on the e.p.s. by 19 cents a share. 70 cents a share versus the analysts’ estimates of 51 cents a share. alcoa also topping on revenue, $7.21 billion, up 9% versus the $7.15 billion analysts’ forecasts. keep for alcoa was rising aluminum prices. aluminum prices up, on average, 17% in the first quarter versus the prior quarter. there is still much more ahead. coming up, we’ll talk to brian hicks, portfolio manager with u.s. global investors, owning 200,000 shares of alcoa in his fund. we will ask him for reaction to alcoa’s numbers. we’ll bring you more on the markets as gold hit $600 an ounce today.
点击播报
Listen Market briefing -- Lori (slow)
Nymex --- Su (fast)
Interview: AMEX---Hyland, John---Portfolio Manager
headquarters here in new york city, i’m lori rothman. thank you for joining us, this is “after the bell.” $70 oil is a very real possibility. we’re almost there now as concerns about iran mount. the u.s. is reportedly considering military action. or we being see $3 a gallon at the pump this summer. the wholesale price is now above $2. we’ll have more in a moment and look at alcoa’s first-quarter earnings due out at any time. we’ll have them as soon as they cross the terminal. the settling numbers―a split decision with the dow jones industrials gaining 20 points, 11,139 and the nasdaq composite index down 5.75 of a point, 2333. the s&p 500 up just about one point, closing at 1296. below 1300 on the s&p. there was strength in energy, financials, software, and in london trading, crude oil hit a record high today. more in a moment. actually, let’s go ahead and talk about energy which stole the spotlight today. crude oil futures nearing $69 a barrel here in new york, touching a record in london. stoking the rally, concern about possible disruptions to oil exports from nigeria and iran. nymex oil futures rose more than a dollar, closing at $68.74, a gain of 2% and the highest close in seven months. checking other energy futures, highing oil soared 3%. natural gas rose 2%. gasoline prices rose above $2 a gallon. su keenan spent the day at the nymex and is back with more with what is behind today’s rally.
>> traders and analysts say concern about heightened tensions with two of the world’s biggest oil producer, iran and nigeria, combined with evidence of strong presummer gasoline depend, kicked the recent energy rally into high gear. in the words of john kilduff, the latest published reports about possible u.s. military action against iran upped the ante, putting the geopolitical rally in full swing. earlier today, president bush, in his speech on terrorism, said, “what you’re reading is wild speculation.” still, some traders say short-covering scrambling to cover bets that energy prices would drop, combined with new buying and technical factors, pushed crude within $2 to the record price.
>> the all-time high, $70.85, if we had bullish stock reports on wednesday, we could see a run at it wednesday afternoon.
>> crude oil was also pulled higher by concern gas supplies will be scarce nomeet the peak summer driving season. one analyst called the last week’s plunge in the nation’s gas supply one of the biggest declines on record.
>> if you find a nymex crude futures contract challenging to keep track of, there is a brand new alternative, as of today, for investing in oil. it’s the very first exchange-traded fund that tracks oil and debuted on the american stock exchange. john hyland is the fund energy of the u.s. oil fund and is live at the amex. welcome.
>> thank you very much.
>> you opened today at $68.25 and closed at $60.22. why don’t you think the u.s.. o.didn’t near gains in crude oil today.
>> you start from a complete stop. uplike most e.t.f.’s what would be posting prices today, they started the day with what they owned from the day before. in our case, we bought the crude oil today. we remained to be seen what our final n.a.v. actually will be and it should reflect the gains we received. our fund is taking the invested money and buying first or second month oil future contracts on west texas intermediate as traded on nymex and other places so we still should see positive action there but in terms of the trading as it occurred during the day,ates bit television is starting from a pretty cold start and we think that from this point on it should be easier to track and follow since every day we will start with what we held the day before.
>> john, tell me about your current investors.
>> it’s a little difficult on the first day to tell who exactly is using it and how they’re planning to use it. a lot of people assume and i’m not sure entirely justifiably, that this will be used by retail investors as a way to get access to crude oil exposure or they assume that this will be used by people just looking for long exposure. and both of those may not be the case. we have certainly heard a lot of talk that there willd be a lot of people such as hedge funds and institutions who, at present, do not use oil futures contracts to gain exposure, even if they’re interested in the energy sector and oil stocks so they may be a user alongside with retail or bigger than retail. and the other portion of it is that it’s not necessarily that people will use this strictly to make a directional investment that they think oil will go up, therefore they’re long u.s.o. they may think oil is go down and so they’ll short it and an equal possibility is that you’re going to have people who are going to use our fund’s shares in combination with oil stocks to either add or subtract the oil part of the equation. when you look at an oil company, a certain part of its stock price is the company and a certain part of its stock price embedded is what’s going on with oil and for certain traders, they may want to be able to cancel out that oil part.
>> john, how much more protection does the e.t.f. give investors to increased oil price volatility?
>> i’m not sure what we are doing will rise to the level of creating additional volatility. certainly the market is very volatile with the geopolitical and the fact that production of crude oil globally is pretty constrained. we’re a pretty small or even if we were to grow quite rapidly, we’re a small drop in the barrel, as it were, compared to the size of the oil market . as far as whether we record crude oil prices a turn know point mainly because at the close of crude oil, we saw stocks getting to their lowest level of the day, recovering a little bit but as we closed out, not a lot of fanfare. retail stocks lower on the higher gasoline prices and then we have a lot of companies ready to report first-quarter earnings. micron after the close of trading, also alcoa. alcoa, that was the third biggest gainer in the dow jones industrial average and also at its highest level since december 2004. alcoa havebeen a good performer mainly because of what’s going on in the metals. today, copper rising to a record, leading a rally in other metals. zinc at a record, nickel at its highest since 1989. a lot of the mining and metal stocks performing well. of the 24 industry groups in the s&p 500, retail, a big drag as there is a lot of concern about consumers and what can they afford to spend in the face of $3-a-gallon gas. a lot of retail names and as gas is going higher, hurting transports, especially airlines. the amex airline index, one of the worst individual performers on the day. maybe concern for consumers, leading down some of the homebuilders, also real estate lower, as well. industrials, however, a different story. boeing was the biggest gainer in the dow jones industrial average. without boeing, it was at a record price today. boeing adding about 10 points to the dow in today’s session. a lot of the industrials perform willing. boeing up 15% so far this year. the best performers in the s&p, as you can imagine, it was all those energy stocks. integrated oil and oil service stocks, the big winners today. back to you in the studio.
>> alcoa’s earnings should be out at any time now. we will bring you as soon as they are available. and jeff skilling was on the hotseat today. former reserve bank of new zealand c.e.o. began his first day of testimony, the highlights coming up.
