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Morning Market Report

Gloomy market forecasts all round, as big-name companies post disappointing results.

The market is down 1.4 points. The Dow Jones was 140 points lower at 16,361.

The return of concerns about Ukraine dominated Friday’s trading session and the market fell at the open, trading lower throughout the day. Amazon.com fell after an earnings disappointment and cautious guidance, and biotechnology and momentum names were also weaker. Trading volume was a bit below average in a 170 point range. On Thursday, the S&P rose three points while the Dow was unchanged.

Ukraine gave Russia 48 hours to explain the presence of its troops along the border as it resumed military drills. US, French, German, Italian and UK leaders agreed to another round of sanctions against Russia for failure to observe the Geneva accord signed the previous week.

US earnings were mixed but generally weaker  —  Amazon.com fell 9.9% after missing earnings estimates and issuing cautious guidance and Ford was also weaker. But Starbucks and Microsoft both rose after beating estimates.

Visa fell 5% after saying US sanctions on Russia were crimping its transaction volumes, and that revenue growth would slow more this quarter.

The VIX volatility index rose 5.56% to 14.06.

US economic data was mixed but largely ignored  —  consumer sentiment rose to a 9 month of high of 84.1 which was better than expected but the Markit’s services sector index showed expansion slowed to 54.2 from 55.3 and the composite PMI fell to 54.9 from 55.7.

European markets were weaker  —  The UK FTSE was down 0.26%, the French CAC was down 0.80% and the German DAX was 1.54% weaker.

The Aussie dollar was weaker and is currently trading at US92.74c.

Gold rose US$10.20 or 0.8% to US$1300.80 an ounce

Oil fell US$1.34 or 1.3% to US$100.60 a barrel.

Iron ore fell US$2.20 to US$111.00 a tonne on Friday, after a US$1.00 a tonne rise on Thursday.

Base metals were mixed  — nickel rose 0.55% and copper was 0.16% higher but aluminium fell 1.35% and zinc fell 0.88%.

STORIES

  • Acrux (ACR) — Down 13% in early trade after Eli Lilly reported Axiron net sales of $39.5 million. Back in January the US FDA issued a Drug Safety Communication stating that the FDA is investigating the risk of stroke, heart attack and death in men taking FDA-approved testosterone products.
  • BC Iron (BCI) — Quarterly Production results. 1.22 million tonnes shipped by the NJV (BCI’s share was 0.76mt). NJV sales guidance of 5.8-6.2mt maintained for financial year 2014.
  • Fortescue Metals Group (FMG) — CEO Nev Power says FMG may need to close its mines if tugboat crews walk off the job. The industrial dispute is threating to halt shipping of iron ore through the port because the Maritime Union of Australia has been unable to agree on a new workplace agreement for deckhands on tugboats. The deckhands are seeking improved pay and increased leave entitlements. Although the details aren’t clear, what is clear is that tugboat workers are on a pretty good wicket. It’s understood that they earn $140,000 a year and a tugboat master earns $300,000 a year. It’s also clear that if they go on strike, the entire operation of port would likely be halted.

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