The market is struggling today – down 135 – the rally was too good to last. The SFE Futures suggested an 88 point fall in the market this morning.

WALL ST DOWN 175 – Wall St. moved in a 196 point range and finished the session lower for the first time in three sessions after Federal Reserve Chairman Ben Bernanke admitted the Fed is forecasting slower US economic growth for 2008. Bernanke told the Senate Banking Committee, “the outlook for the economy has worsened in recent months, and the downside risks to growth have increased” but signalled the Fed is willing to continue cutting rates to improve the situation. The Fed began cutting rates last September and in just 8 days in January cut rates by 125bp, the biggest one-month rate cut in 25 years. Financials struggled overnight on the back of Bernanke’s comments and after broker Keefe Bryette & Woods cut its 2008 earnings forecast for several banks – JP Morgan fell 2.8%, Citigroup lost 1.7% and UBS US-traded shares fell to a 5 year low. There was plenty of economic data overnight, the Labor Department showed 9,000 less Americans filed for unemployment benefits last week, the Commerce Department said the trade deficit fell $711.6m last year – a fall of 6.2% (better than expected), and a real estate trade group said sales of existing home fell in 45 states during the October-December quarter. The NASDAQ closed down 1.7% – some brokers are suggesting talk that Yahoo and News Corp joining forces is just that and that Yahoo is trying to create the appearance that they have alternatives to Microsoft’s bid.

Resources down 1.7% on average – BHP down 67c to 3836c and RIO down 202c to 13175c.

Bit quieter today. We get into the results season proper next week. Main results include: Babcock & Brown, Newcrest, Fosters, AXA, OneSteel, CSL, Transurban, Toll, Telstra, Brambles, Qantas, Tabcorp, Woodside, Oxiana, Wesfarmers, Lihir, Caltex, Minara.

Plenty of earnings announcements today…

  • West Australian Newspapers (WAN) announced a 21% fall in 1H profit to $44.3m from $56.1m – below expectations. WAN down a big 7% to 1042c
  • Austereo Group (AEO) said it made a profit of $27.78m in the 1H, up 3.5% from $26.85m last year. AEO down 10c to 201c.
  • Symbion Health (SYB) announced a 1H profit of $56.7m, down 0.4% from $57m last year. PRY now owns 54.64% of the company. SYB unchanged at 408c.
  • QBE Insurance (QBE) struggling on talk about its earnings outlook – currency likely to also be an issue. QBE last traded at 2642c, down 6.7% or 191c.
  • Challenger Financial (CGF) down after the AFR described their business model as “opaque” and said its mortgage business Interstar looked uncertain. CGF down 10c to 267c.
  • Centro Properties Group (CNP) is in a trading halt. Today is also the deadline for Centro to refinance its debt. CNP last traded at 61c.
  • Goldman Sach JB Were agree with Credit Suisse’s recommendation on Pan Australia (PNA) saying it’s worth a BUY with a 140c target price. PNA down 3c to 98c.
  • Aquarius Platinum (AQP) up to an all time high due to its exposure to platinum. The stock is up 62% in the past 6 months. AQP up 11% to 1779c.
  • Macmahon Holdings (MAH) has been awarded a $1.1bn contract for mining work at Moly Mines’s (MOL) Spinifex Ridge molybdenum project in WA. MAH up 5c to 141c.
  • OneSteel (OST) announced plans to restructure its bar bill business to improve its efficiency. OST down 12c to 712c.
  • AFR say Allco Finance Group (AFG) is trying to get out of a deal to acquire a $1.48bn portfolio of US power stations. AFG unchanged at 305c – still in a trading halt.

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Peter Fray

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