The market is up 19. The SFE Futures suggested a 36 point rise in the market this morning.
The Dow Jones was up 108.3 – It moved in a relatively large 120 point range and closed nearly 1% higher in a big session on Wall St on the back of takeover activity and better-than-expected 1Q earnings results. Sallie Mae closed up 17.7% after it agreed to a $25bn offer from two investment funds plus JP Morgan Chase & Co. and Bank of America. Citigroup surprised Wall St. with its 1Q earnings result and was the best performer in the Dow Jones, it announced profits fell by a better-than-expected 11% mainly due to restructuring costs. Retail stocks did well after the Commerce Department announced that retail sales increased 0.7%, higher than the 0.5% expected. NASDAQ also had a good session closing up 1%.
Resources doing well today. BHP up 19c to 3058c and RIO up 43c to 8428c. Metals mostly up overnight, Copper up 0.3%, Aluminium up 0.4% and Zinc 0.6%. Zinifex down 7c to 1560c. Nickel up 0.6%. Oil price hardly moved overnight closing at $63.63. Oil companies ConocoPhillips and Tyson Foods Inc, the world’s largest meat producer, announced they will team up to produce and market diesel fuel for US vehicles using beef, pork and poultry fat. Woodside up 6c to 3961c. Gold up $4.60. Newcrest down 16c to 2364c.
The market has continued its impressive start to the week. The ASX 200 hit a new record high this morning of 6237. Now 6205. Banks are doing well, property trusts are up around 1% across the board, impressive returns for stocks that are supposed to be boring. Gold at $689.20 – flirting with $700.
- Woolworths (WOW) down 43c to 2865c. It announced its 3Q sales this morning, strong numbers but unlikely to lead to big earnings upgrades: 3Q sales increased 8.8% to $10.56bn from $9.71bn a year ago. ABN AMRO hit the nail on the head with its forecast. Attention will now turn to its involvement in the potential bidding for Coles Group (CGJ) assets. CGJ down 7c to 1727c.
- It was good and bad news for Tattersall’s (TTS) yesterday. After announcing a $530m acquisition of QLD’s lottery business Golden Casket, the Victorian government said it would increase the gaming levy on slot machines by $1,300 to $4,333 for each machine. TTS is down 2c to 515c, the stock is up 40% in the past 6 months.
- The Qantas (QAN) bid closes on May 4. Interesting to note that APA hasn’t put out an announcement about the level of acceptances since 23 March when they had 30.1%. They have to notify every 1% move. They need to build some momentum soon – it is thought that 40% is held by arbitrageurs who are expected to accept at the last moment. QAN unchanged at 538c.
- WIN Corp has sweetened its takeover for Sunraysia Television (STV) by around 12% or $17m to $163.2m late yesterday. The revised offer is $27m more than Publishing & Broadcasting’s (PBL) bid that is favoured by STV’s chairman and majority shareholders, Eva Presser. STV unchanged at 1350c.
- Publishing & Broadcasting Limited (PBL) has entered the US casino market after agreeing to pay US$250m for 19.6% of US developer Fontainebleu Resorts LLC, which is building a US$2.8bn casino resort. Good reaction from the market, its shares are up 16c to 1998c.
- The Sydney Morning Herald has reported this morning that Macquarie Media Group (MMG) is set to soon launch a debt funded takeover bid from Southern Cross Broadcasting (SBC). MMG own 13.8% of SBC. There was no mention of a potential price but it has moved the stock: SBC up 44c or 2.59% to 1745c. MMG up 2c to 448c.
- APN is up a touch today after Independent News & Media sweetened their bid from 610c to 620c.
- Citigroup downgraded BHP from BUY to HOLD today and say they prefer RIO.
- Goldman Sachs JB Were downgraded Minara (MRE) from a BUY to a HOLD and took it off their “Conviction list”.
We have an article in MARCUS TODAY today looking at the very close correlation of some stocks to their “Big Drivers” – it begs the question…why look at research in detail when all you really need to get right is the theme. Stocks that find themselves in the right place will perform despite themselves.
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