Market briefing --- Lori (slow)
NYSE --- Deb (fast)
Nasdaq --- Robert (slow)
Bausch & lomb --- June (slow)
welcome, from world headquarters in new york city. i’m lori rothman. positive comments from both, better-than-expected earnings from circuit city, gave the market a shot in the arm. investors are optimistic when it comes to advanced micro devices. their numbers are due out momentarily. let’s first check the settling numbers as the market close. all three major indices gain today with the dow up 42 points, 11,131. you had some of the industrial stocks gaining. boeing signing a contract with china along with caterpillar and general motors leading the dow. on the s&p 500 today, you had a gain of 1.76 of a point, 1288, the close. capital goods, healthcare equipment and diversified financials among the gainers. and the nasdaq gained four points to close at 2314. fireworks in the bond market . treasuries took another hit with yields on the 10-year note making a run at 5%. a lot of it having to do with perceptions about the fed. central bankers may continue with the tightening cycle, raising interest rates at least twice more to keep inflation under control. that would take the overnight lending rate to 5.25%.
>> right now, there’s a lot of defensive attitude going on, price of oil, price of gold, the iranian situation. a lot of talk about consumer spending and yet when you look at the numbers from retail sales and employment, it shows an economy that’s very strong and a lot of people have thought that the fed was probably going to give pause around the 4.75 level and now everybody’s hoping that’s 5% and that’s coming up at the may meeting.
>> as for the two-year note, it was down, yielding 4.91%. but we may have to take the price action with a grain of salt. the selling took place on lighter volume because of passover and upcoming easter holiday. as for currencies today, the dollar gained a little momentum, touching a one-week high versus the euro. after the commerce department said the trade deficit fell in february. right now, the euro is little stronger versus the dollar, with the dollar also weaker against the pound and stronger against the yen. the red ink came in at 65.7 billion dollars, following a record $68.6 billion in january. the other part of the equation is the consumer. with demand for chinese goods rising, it suggests the trade deficits will be larger in months to come. stocks finished higher even in the face of the bond market selloff. deborah kostroun is at the floor of the new york stock exchange. deb, almost seemed like traders had the mentality like a friday but that was not the case. boeing, though, with a record close.
>> it really was. we were watching boeing, not only today but boeing has been hitting records and has good performance so far this year. boeing closing at a record once again. they did receive orders from china. but it was also comments about the fact that they will increase shipments to china. it aims to win 20 more planes this year to try to protect that lead over airbus. and they also plan to sell 120 planes this year. that would match last year’s total. so boeing’s second biggest gainer in the dow jones industrial average. even general motors performing quite well. general motors doing well on the fact that we have those comments coming out of the new york auto show from vice chairman bob lutz saying it looks like general motors can end losses in north america with a 25% market share but one of the things they need to do, keep incentives low and boost margins. not only did we have things like boeing performing well, but other capital goods stocks performing quite well in today’s session, even deere with a good day. but stocks advancing overall. we did have a little bit below-average volume so things creeping along in the afternoon. our volume, 1.3 billion shares. crude oil, it was down just a little bit today, down .5%. but we’re still near the august highs. those highs, right after hurricane katrina, we’re at $68.62, close to that $70 a barrel. as lori mentioned, treasuries dropping and yields inching higher so the concern is that the fed will raise rates a couple more times. leaders, the capital goods, boeing, honeywell, caterpillar, all doing well today. healthcare also doing well, even though bausch & lomb, the biggest drag in the s&p healthcare index, the h.m.o.’s doing well and h.m.o. stocks putting in an impressive performance. circuit city, biggest gainer in the s&p 500, releasing earnings today, beating analysts’ forecasts. their profit jumped 65%, similar to things we’ve heard from other electronic retailers that they had really good holiday sales of flat-panel tv’s, notebook computers and mp-3 players. we’ll look at the retailers again tomorrow. we get retail sales, expected to have increased .4%. we’re looking at positive expectations on retail sales. getting ready for a.m.d.’s earnings, robert gray will check in on the semiconductors over at the nasdaq. robert?
>> deborah, thanks a lot. the nasdaq did snap a three-day losing skid and we have been watching the semiconductors. the s.o.x. philadelphia semiconductor index moving higher but a.m.d.’s rival, intel, shares moving lower, down four cents on the day, touching its lowest level since may 2003 in today’s session. we’ll watch to hear what a.m.d. has to say in their forecast, their outlook for the effect on intel which reports its earnings next week. a.m.d. may be calling the tune for many of the computer-related shares in tomorrow’s session as we are expecting lighter volume. volume was well below the average in today’s session. we did see the nasdaq rising, the composite, on the session, but only 1.5 billion shares changing hands for the nasdaq. usually there are a little more than two billion shares as the average in 2006. concerns about the fed raising interestice more sent financials and banking stocks lower. you’ll see the financials, banking stocks moving lower. little change for the oval index. i heard from traders, including tim smalls at execution l.l.c. that a lot of people are closing up shop and going into maintenance mode with the holidays beginning today and passover and easter this weekend. not expecting a lot of movement but we will be following the computer-related shares tomorrow. all these concerns about inflation and higher interest rates, we did see a lot of the consumer-related stocks gaining in today’s session including california pizza kitchen, shares surging 6% today. california pizza kitchen, on preliminary results, boosting its forecast, saying it will meet or beat the average estimate of analysts by one cent. tivo shares up 8% today, extending its deal with directv, that service continuing for another three years, including the revenue from that deal, helping those shares up 8% today. teradyne up almost―serra dine up almost 10% today. that’s it from the nasdaq. sending it back to you.
>> thank you. bausch & lomb’s executives are speaking out today as stores across america clear their shelves of the company’s contact lens cleaner. it’s been linked to do a rare infection that can cause blindness if not treated. june grasso has the latest development. june?
>> lori, we’llr bausch & lomb shares are down another 7% today after a 15% plunge yesterday when the company suspended shipments of renu with moistureloc, the fastest growing product for cleaning contact lenses. today, the chief executive officer said in a conference call that tests show the product is effective in killing the fungus that causes the infection and the company has examine hundreds of possibilities to find a link between the product and illness.
>> batch tanks to production lines to source of chemicals, source of packaging, trucking companies to shipping routes, you name it. through all of that analysis, we haven’t found a correlation with anything.
>> u.s. regulators are investigating the product after 109 reports of cornea infections in the past 10 months. renu with moistureloc accounted for 45 million dollars of bausch & lomb’s sales last year and was the flagship product of the company’s most profitable unit. zarrella acknowledged there may be ripple effects, hurting sales of other bausch & lomb products. but he argued the number of infections is small.
>> the c.d.c., at our request, had initiated a surveillance program that has so far resulted in the accumulation of 109 cases of suspected fusarium keratitis infections in the united states. that’s out of more than 30 million contact lens wearers.
>> piper jaffray analyst steven hamill said in an interview that the company has only days to come up with evidence their product is not to blame or take more aggressive action to avoid permanent damage to the renu brand. retailers pulling the product including c.v.s., walgreens and rite aid.
>> advanced micro devices is expected to deliver first-quarter results at any time. we will have the numbers for you and speak with an analyst who has a sell rating on the stock. plus, general motors on its business in north america. it’s been hemorrhaging for years but vice chairman bob shuts confident they’ll turn things around.
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Listen Focus: G.E.
>> general motors can complete a plan to end losses in north america with a 25% market share if it keeps incentives low. that’s what general motors’ vice chairman bob lutz told reporters at the new york international auto show today. lutz also said he does not intend to rely on incentives to boost sales. he said japanese automakers are boosting their incentives to try and attract buyers.
>> some japanese brands have now surpassed us in incentives and one large japanese producer, in full-sized pickup trucks, is outspending us by a considerable margin. that’s good news because it shows they’re just like the rest of us, but the bad news is it raises the level of competitive intensity.
>> lutz says general motors’ plan is taking hold and the company is pleased with strong sales and higher margins for redesigned s.u.v.’s. >> i am overwhelmingly satisfied with how the new s.u.v.’s are selling, especially the escalade. the escalade is a barn-burning hit and with heavy demand from europe and the middle east, as well.
>> lutz also said he does not expect a strike at delphi. that’s g.m.’s biggest supplier. the automaker is relying on new models and cost cuts to recover from a $10.6 billion loss last year. and we are still waiting for the latest earnings from advanced micro devices. shares are halted in the extended hours’ trading session ahead of the release. we’ll bring it to you as soon as the numbers cross. more on the energy story. crude oil futures fell for the first time this week from their highest price in seven months. nymex crude futures closed .5% lower at $68.62 after the latest government report showed an abundance of supply. a different story for the nation’s gasoline supplies which fell for the sixth straight week. that pushed gas prices to their highest since october. bloomberg’s su keenan is here, now, with the latest on energy trading. su?
>> the latest energy department report hit the market with a bang, setting off a rally in crude, gas and heating oil, initially pushing crude futures within 40 cents of the $70 mark. while we learned crude supplies surged at a greater-than-forecast rate last week, this bearish news was overshadowed by the gasoline news. gasoline stockpiles fell at twice the forecast rate, according to analysts surveyed by bloomberg, and it was the sixth straight weekly drop. the steady week-after-week decline in motor fuel supply this far in advance of the summer driving season is heightening concerns about possible shortages. another key surprise in today’s report, the refinery utilization number, it fell almost 1% more than the median analysts surveyed by bloomberg. brim mar trust manager eric thorne says this could be a problem.
>> the big story today is the refining capacity and ability to turn that crude into other products like heating oil and gasoline and that’s where we’re seeing a bit of an issue and i think that’s why you’re seeing the reaction of prices going up today. there isn’t the ability of refiners to produce as much as we need.
>> the strong rally in gasoline prices bolstered the rally in crude oil. at this time last month, nymex futures were trading close to $60. now they’re almost $9 higher. and concern about possible supply disruptions resulting from a conflict with iran is making traders bet prices will continue to rise through the summer. august and september futures trading above $71 and october through theed of the year, those contracts trading above $72.
>> moments ago, a.m.d. reporting first-quarter profit earnings per share 31 cents, beating estimates by eight cents a share. revenue was in line with forecasts, $1.33 billion. as far as the second quarter, a.m.d. definitely providing an outlook here, saying their sales will come in unchanged to slightly down. shares of a.m.d. were halted in the extended session, not sure―they do remain halted at the moment so no extended session reaction from the shareholders as of yet. let’s go ahead tawnd tell but metals and the action there today. you heard from su, oil and gas prices cooled today. copper remains on fire. the most active may futures contract rose to another record high, settling at more than $277 a pound in comex floor trading, a gain of nearly 2%. traders say the rally is due to fundamentals with the idea that supplies cannot meet demand. copper producers are having trouble keeping up. credit suisse says there will be a deficit of 100,000 tons this year. rio tinto group, the world’s third largest mining company, said it will spend $3 billion on projects this year, up 20% from last. rio tinto also said commodity prices will remain above the long-term trend for a while, maybe even for a number of years. stay with us. we’ll get a.m.d. earnings reaction.
