The market is down 27 – the SFE Futures suggest a 7 point fall in the market this morning.

WALL ST DOWN 28 – Wall St. moved in a 98 point range and finished the week in a negative mood on the back of lower-than-expected earnings results and disappointing economic data. Economic data weighed on the market ahead of the Presidents Day holiday on Monday.

  • The Labor Department said prices of goods imported into the US increased by a higher-than-expected 1.7% in January
  • Reuters/University of Michigan survey showed consumer spending fell to 69.9 this month – the lowest level in 16 years
  • Fed Bank of New York’s general economic index fell for first time in 3 years to minus 11.7.

Warren Buffett’s Berkshire Hathaway announced in a filing with the US Securities and Exchange Commission that it had an 8.6% stake or 132.4 million shares in Kraft Foods Inc. – the stock closed up 10%.

All three major indexes had a positive week – the Dow Jones index put on 1.3%, the S&P 500 closed up 1.4% and the NASDAQ finished 0.74% higher helped by Comcast Corp. – which had its biggest weekly gain in 5 years after it announced a $6.9bn share buyback and issued its first dividend in nearly 10 years.

In the news today…

  • According to the South China Morning Post, Aluminium Corp of China can’t make a full-scale bid for Rio Tinto (RIO) for 6 months. RIO down 120c to 13590c.
  • Primary Health Care (PRY) announced it has raised around $958m in an institutional entitlement offer. PRY down 62c to 676c.
  • ABN AMRO initiates coverage on PrimeAg Australia (PAG) with a BUY recommendation and target price of 210c. PAG up 0.5c to 163.5c.
  • Tropical cyclone Nicholas causes BHP Billiton (BHP) and Chevron to cease oil production in WA. BHP down 39c to 3890c.
  • Bendigo Bank (BEN) announced 1H profit of $72.8m, up 34% from last year. Cash profit of $70.7m (Were’s forecasted $73.6m), up 28%. Declare 28c interim dividend. (Were’s expected a divi of 35c). Touch below expectations but after CBA the market had been fearing something worse. They confirm earnings guidance of 12% earnings growth. BEN up 5c to 1135c.
  • ANZ Banking Group (ANZ) released their Trading Update this morning – expects to book higher provisions but likely to surpass last fiscal year’s growth of 11.5% (before provisions). ANZ down 133c to 2258c.
  • UBS Warburg advises investors to stay away from Aussie Banks. Commonwealth Bank of Australia (CBA) goes 113c ex dividend today as does Coca-Cola Amatil (CCL) and United Group (UGL).
  • Allco Finance Group (AFG) delay interim result – supposed to be announced later today – new date not mentioned. AFG last traded at 305c.
  • Goldman Sachs JB Were up their FY09, FY09 and FY10 EPS forecasts by over 100% for Alumina (AWC). AWC up 5c to 599c.
  • Ansell (ANN) performing strongly after its CEO said the company’s 3 main business units are recession resistant. ANN up 10c to 1259c.
  • Centro Properties Group (CNP) been given until April 30 by its banks to restructure its finances. CNP up 5c to 66c.
  • Domino’s Pizza Enterprises (DMP) was added to the Were’s BUY Conviction list. DMP unchanged at 305c.

In the MARCUS TODAY newsletter today we have an updated Results Diary, a regular look at the research post results the day before.

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Peter Fray

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