The market is up 21. The SFE Futures suggested a 32 point rise in the market this morning.

The Dow Jones was down 1 overnight – It moved in a big 220 point range and finished slightly lower after being down as much as 206 points after Merrill Lynch announced the biggest quarterly loss in its 93-year history. Merrill’s share price hit a 2 year low (down 5.9%) after telling the market it had lost $2.24bn in the 3Q, a huge turnaround considering it had reported a $3.05bn profit this time last year. The company said it wrote down $7.9bn for collateralized debt obligations thanks to the subprime mortgage crisis, its shares are down 33% since the start of the year. Ohio’s biggest bank, National City Corp. fell 2%, it reported a lower-than-expected 3Q profit despite selling its subprime mortgage unit to Merrill Lynch just before the industry went pear shaped. Chipmaker Broadcom lost nearly 20% after announcing a 75% fall in earnings after it spent more money on its research department than what it should have, Deutsche Bank cut their recommendation on the stock to hold from buy. The housing market continued to struggle, the National Association of Realtors said purchases of previously owned homes fell by 8% in a month, the biggest fall in 8 years. The NASDAQ lost 0.9%.

Resources mixed today…BHP down 48c to 4532c and RIO up 9c to 10459c. RIO announced late yesterday it had succeeded in its US$38.1bn takeover of Alcan after receiving acceptances from the required number of shareholders. It received 79.41% of shares in the company with a further 5.67% to be received by notices of guaranteed delivery. RIO extended its US$101 a share offer for the Alcan until Nov. 8. Metals all down overnight, Nickel down 3.1%, Zinc down 2.7% and Copper 1.4%. Aluminium down 1.1%. Zinifex up 10c to 1775c after announcing its production numbers this morning. No surprises, as expected – the market was content to see zinc production increased 13% in the last Q. They are also confident in appointing a CEO before the year is out. Oil price up $1.85 to $88.30 on the back of unexpected falls in US crude inventories.

According to the Energy Department, supplies fell by 5.3m barrels, analysts had expected supplies to increase by 300,000 barrels. Woodside up 88c to 5288c. Gold up $2.50. Newcrest up 36c to 2936c.

Lots of stuff going on today…

  • The big news today is ANZ Banking Group’s (ANZ) earnings result – the stock is down 84c or 2.7% to 3027c – It announced a 13% increase in net profit to $4.18bn. Cash profit was up 9.4% to $3.926bn, just short of analysts expectations. They expect further revenue growth for the rest of the financial year but did warn that problem debts are likely to increase this year which might force them to increase interest rates for customers. The market was also disappointed with the lack of guidance – new CEO Michael Smith told the press that he doesn’t believe in giving forecasts. They declared a final dividend of 74c, which was at the lower end of expectations.
  • Ten Network (TEN) also reported profit numbers today – it announced a 44% in net profit to $66.1m, a little better than analysts had expected. TV division did well, EBITDA up 3.5%. The company said momentum is strong and expects revenue to increase by double digits. TEN down 5c to 280c.
  • Coca-Cola Amatil (CCL) doing extremely well today, up 5% to 9982c, they sold their South Korean business for $520m. Not a best result considering they were planning on receiving between $520m and $545m. The business had $106m worth of debt, analysts expect the remaining $416m will be used for some capital management program. CCL will update the market on December 5. Citigroup definitely thinks so; they see potential for a share buyback with CCL having around $120m worth of franking credits available.
    Transurban (TCL) has named Chris Lynch as its new Managing Director. Lynch was a former BHP executive but left the company after being overlooked for the top job. He will taking over from MD Kim Edwards who will retire after more than 10 years in the role. TCL down 5c to 713c.
  • RAMS Home Loans Group (RHG) has continued to cause grief for its investors – down another 4.5% yesterday to 32c. It’s unchanged today.
  • Companies going ex dividend today include ADG, AMA, BPT, CSH, PCG and RPG.

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Peter Fray

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