The market is up 49. The SFE Futures suggested a 64 point rise in the market this morning.

The Dow Jones was up 187 moving in a 198 point range and recorded its biggest one-day gain this year on the back of the Beige Book, some stronger-than-expected economic figures and declining bond yields. Retailers closed higher after the Commerce Department announced retail sales increased by 1.4% in May, the highest in 16 months and double economists’ expectations. Furthermore, the Federal Reserve’s Beige Book report said the US economy expanded at a reasonable pace in the first part of the 2Q and that there was no indication of any “price pressures”. Energy stocks finished higher on the back of a 1.2% rise in the oil price and the NASDAQ closed up 1.3%. Exxon the biggest contributor to the S&P 500 index.

Resources doing well today along with everything else. BHP up 107c to 3386c and RIO up 315c to 9516c and up 5.2% in ADR form overnight. Metals mixed overnight. Aluminium up 0.7% and Copper up 1.6%. Zinc down 1.1% and Nickel down 0.5%. Zinifex up 39c to 1840c. Oil price up 81c to $66.17 after the government announced US crude oil inventories increased by a smaller-than-expected 100,000 barrels last week. Exxon was the biggest contributor to the S&P 500 index. Woodside up 101c to 4369c. Gold down 40c. Newcrest up 32c to 2312c.

Doesn’t take much to put sentiment back on its feet. The first fall in bond market yields and we are all super bulls again. US 10 year Bond yields down from 5.29% to 5.208%. The market is now factoring a 25% chance of an Australian interest rate rise next month. The US bond market is factoring in a 12% chance of a rate rise this year.

  • The AFR reported this morning that the ACCC will look into Wesfarmers’ (WES) proposed $21bn acquisition of Coles Group (CGJ) because of concerns about its impact on competition in the retail hardware and liquefied petroleum gas markets. WES is up 60c to 4007c. Coles is now below the 1647c WES bid price because of concerns the deal will be delayed and that competition issues may turn up. WES is confident they won’t. WES is up 61c to 4011c.
  • Toll Holdings (TOL) up 43c or 3.1% to 1443c after announcing its wholly owned subsidiary Toll Express (Asia) has made an offer to acquire the 74% of Singapore-listed Sembawang Kimstans it doesn’t already own for around US$156m.
  • Plenty of Westfield Group (WDC) research around after their $3bn rights issue was announced this week. UBS Warburg have upped from REDUCE to NEUTRAL with a 2118c target price up from 2145c. WDC last traded at 2090c.
  • Sigma (SIP) up 1c to 232c after announcing they remain in discussions with a private equity consortium about whether a joint offer can be formulated for Symbion Health (SYB). Under the arrangement, SIP would buy the consumer products unit and the consortium the drug store distribution business. SYB down 1c to 432c.
  • Clive Peeters (CPR) up 8c to 218c. It closed 14% lower yesterday after issuing a profit warning due to weaker-than-expected sales at their new NSW stores. They now expect a flat FY07 NPAT in the range of $12.1m-$13.1m. We all know what happened to Megamart, Coles couldn’t make money out of it and sold it (some stores to Harvey Norman). Looks like CPR is under the pump as well. They sell an almost identical product range to Harvey Norman.
  • Sino Gold Mining (SGX) announced this morning the acquisition of three strategic exploration licenses in Shandong Province. SGX up 24c to 562c.
  • Loads of broker upgrades this morning for Virgin Blue (VBA). Both Merrill Lynch and Credit Suisse upped their recommendation to “Buy” and “Outperform” respectively on the back of solid traffic figures from Qantas (QAN) illustrating loads and pricing likely to remain strong in FY08. VBA up 15c to 248c. Chart looks terrible.
  • Amcor has finished its share buyback. Share price on the slide for the last week. Up 1c to 706c this morning.
  • Telstra up 3c to 474c. Lots of press this morning about their “ultimatum” to the Government. Make a decision on FTTN by the end of the month or we will allocate the capital to another project.
  • MFS Limited (MFS) up 18c to 592c on plans to sell $1bn worth of collected travel and accommodation assets into a vehicle in partnership with CVC Asia Pacific.
  • ERA down 4.7% or 95c to 1900c on the back of an analyst site visit and presentation outlining the recent rain damage and lowered production profile.
  • Glenn Stevens the Governor of the RBA gives a speech today in Brisbane at lunchtime on “Economic Conditions and Prospects”.
  • Charlie Aitken at Southern Cross Equities tells us “If you are underweight resources (and resources services companies) you are about to be crucified from a performance perspective” and sets target prices: BHP $40, RIO $120, Fortescue $50, Oxiana $5.

In today’s edition of MARCUS TODAY we have an article called “Pump it up” looking at the rise of the Tulip, how to identify a bubble and a comment on the current market “bubble”. Go to the website for a free five day trial.

THE MORNING MARKET REPORT is provided by the MARCUS TODAY daily stockmarket newsletter. You can subscribe for a free five day trial here.

Get Crikey for $1 a week.

Lockdowns are over and BBQs are back! At last, we get to talk to people in real life. But conversation topics outside COVID are so thin on the ground.

Join Crikey and we’ll give you something to talk about. Get your first 12 weeks for $12 to get stories, analysis and BBQ stoppers you won’t see anywhere else.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
12 weeks for just $12.