The market is down 19. The SFE Futures suggested a 20 point fall in the market this morning.

The Dow Jones was down 3.9 – Wall St. moved in a 77 point range and closed slightly lower in what was a relatively quiet session on Wall Street ahead of the Federal Reserve’s decision on interest rates tomorrow. Takeover activity continued to dominate, AK Steel Holdings closed up 9.2% on talk the world’s largest steel company ArchelorMittal was looking to make an offer and Thomson Corp. said it plans to acquire Reuters Group for $17.5bn sending the Reuters share price 14% higher. Home Depot closed lower after the National Association of Realtors announced existing home sales fell by a worse-than-expected 2.9% this year to 6.29 million. The majority of economists are expecting the Federal Reserve to highlight inflation as the main threat to the economy but believe interest rates are likely to remain unchanged at 5.25%. The NASDAQ closed slightly higher

Resources mixed today. BHP down 41c to 3077c and RIO down 111c to 8859c. Metals mostly down overnight. Nickel and Zinc both down 1.2%, Zinifex up 11c to 1750c. Copper down 1.9% and Aluminium up 0.2%. Oil price up 78c to $62.26 on the back of disruption fears after three major oil pipelines were bombed by militants in Nigeria. Woodside down 1c to 4282c. Gold down $3. Newcrest down 15c to 2278c.

There are a few things going on in the market today but it seems its all about the budget delivered last night. It provides for an underlying cash surplus of $10.6bn, the government’s tenth surplus. On the face of it there don’t seem to be any significant implications for listed stocks. Good for business, good for wealth management and it should boost the A$ – the Australian economy is obviously in fine fettle and that impacts positively on the image of all Australian assets in the eyes of international fund managers and traders.

  • Alinta (AAN) has been suspended this morning pending an announcement. We are expecting to see an increased and recommended bid from Babcock & Brown’s consortium and details of the upped bid from Macquarie (thought to include a $1560c cash offer). ANN last traded at 1525c.
  • David Jones (DJS) up 2c to 488c after reporting a 8.4% increase in 3Q sales to $436.7m and confirming its 1H guidance. CEO Mark McInnes said 3Q growth was slightly down on the 8.9% in the 2Q but maintained forecasts for an 8.5%-13.5% profit growth outlook.
  • National Bank (NAB) down 20c to 4412c. It has its interims tomorrow. We expect an 87c interim dividend; with NPAT of just over $2bn. On a PR of 15x it is unlikely the NAB interims can surprise enough on the upside to make them a buy before results.
  • Publishing & Broadcasting (PBL) down 23c to 2175c after their announcement yesterday to split the company. A few upgrades this morning from brokers saying the move makes a lot of sense and is a sensible one. Price was up 6% yesterday.
  • ANZ Banking (ANZ) up 17c to 3070c. It announced this morning that David Gonski will step down from the board after deciding to join ASX Ltd (ASX) as a director.
  • Alliance Resources (AGS) down 33c or 14% to 200c. It is down 30% since the start of the week when it announced its initial resource estimate for 4 Mile West deposit was wrong.

We have an article in the MARCUS TODAY newsletter titled ‘Kids and Shares’, a great guide for any parent interested in giving Thomas the Tank Engine a miss and buying some shares for their children or grandchildren.

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