The market has started the week in a positive mood – up 75. The SFE Futures suggested a 43 point rise in the market this morning.

The Dow Jones closed up 66 on Friday – It moved in a 161 point range and finished the week in a positive mood despite lingering credit market concerns and disappointing earnings results. Fannie Mae lost another 5.5% after falling 10% on Thursday after an article in Fortune Magazine suggested the company has understated losses by changing the way it measures the impact of credit losses, its CEO has denied this saying the calculation method used was accurate. Both Starbucks and FedEx (down 4.5%) told investors to expect lower earnings, Starbucks also cut its sales forecast and announced its first ever fall in US customer visits. The NASDAQ put on 0.7%, Yahoo rallied on talk that Microsoft will soon bid for the company. Cisco Systems Inc. announced intentions to buyback another $10bn of its own shares, according to research firm Westport, US companies have announced $733.5bn worth of share buybacks this year, 23% more than the same time last year. Despite the heavy falls, all three major indexes finished the week higher, the Dow Jones put on 1.03%, and both the NASDAQ and the S&P 500 closed up 0.35%.

Resources outperforming today led by the big boys, BHP up 85c to 4200c and RIO up 469c or 3.6% to 13590c. Metals mostly down on Friday, Zinc down 2.5%, Nickel down 1.7% and Aluminium 0.7%. Copper up 1.6%. Zinifex up 21c to 1560c. Oil price up $1.44 to $94.81. Woodside up 121c to 4808c having announced a supply agreement with Taiwan’s CPC Corp. Gold down 30c. Newcrest up 115c to 3340c.

A bit happening today….

  • Macquarie’s research team is going to make a few headlines tomorrow with their 35 page piece of research initiating coverage on Fortescue Metals (FMG). Don’ think Andrew Forrest will be too pleased or worried about their headline recommendation – UNDERPERFORM with a 3557c target price. Fortescue has lived with big broker skepticism and almost feeds off it. A bit more won’t worry them. The FMG share price has jumped 1% this morning just to make the point, up 65c to 5915c.
  • Funtastic (FUN) has gone into a trading halt to allow the company “to review the company’s trading forecasts and market guidance”. Judging from the share price performance recently (falling over) it’s unlikely to be good news. FUN last traded at 118c (down from 200c six months ago).
  • Goodman Fielder is down 4% this morning on a trading update which includes a statement that profits will be flat instead of previous guidance of “further profit improvement” – looking at the share price…the market had already factored in a drought and you know the golden rule, buy drought stocks in a drought. GFF down 11.5c to 198.5c.
  • James Hardie (JHX) is up 7.1% or 45c to 677c on its 2Q profit which is down 32% to US$46.5m against forecasts of $49m, but most of the difference appears to be due to a higher tax charge than expected. Sales down 1%.
  • All 27 Miners trapped in the Ballarat Gold mine owned by Lihir (LGL) have now been rescued. It is unclear if the collapse will affect budgeted production of 100,000 ounces of gold in 2008. Lihir’s total production in 2008 is expected to be 900,000 ounces. The market doesn’t seem to think it will, LGL up 10c to 391c.
  • A bit of kick in the teeth for Bank of Queensland this morning – Mackay Permanent Building Society are no longer recommending the banks takeover offer to its shareholders saying the offer from Wide Bay Australia (WBB) is superior. WBB upped their initial offer last week to 1108c for each Mackay share, BOQ’s offer stands at 925c a share. BOQ up 23c to 1983c despite the news, WBB unchanged at 1260c.
  • Computershare (CPU) announced they have acquired a 30.2% stake in German based bank VEM Aktienbank. CPU up 25c to 1065c, the stocks is up 19% in the past month.
  • Macquarie Capital Alliance Group (MCQ) has sold the Zig Inge Group for $641m to Retirement Villages Group. MCQ up 16c to 400c.
  • Companies going ex dividend include COU, FPA and TEL.

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