The market is down 135. The Futures suggested a 36 point fall in the market this morning. Looks as if we are set for another nasty session on Wall Street tonight, the Dow Futures are down 150.

The Dow Jones closed down 194. It was down 313 at its worst and up 48 at its best. The market was initially up on good inflation numbers then collapsed on the news that Bear Stearns had a liquidity problem. The Fed and JP Morgan have bailed out Bear Stearns for 28 days after its “liquidity position significantly deteriorated”. Inflation numbers (CPI) were better than expected– headline inflation was flat against expectations for a 0.2% rise. Core inflation was also flat against expectations for a 0.2% rise. Headline and core inflation are up 4.0% and 2.3% on the year. Consumer Sentiment fell from 70.8 in Feb to 70.5 in March…a 16 year low. Bush meets with his Working Group on Financial Markets tomorrow. He said on Friday that “The market now is in the process of correcting itself, and delaying that correction (through rash policy reaction) would only prolong the problem”.

  • Both BHP and RIO up in ADR form on Friday, 0.86% and 0.57% respectively. BHP down 21c to 3771c.
  • Metals mostly down – Zinc down 1.2%, Copper down 0.2% and Aluminium down 0.9%. Nickel up 1.2%.
  • Oil price down 18c to $110.03 – Oil analysts are suggesting oil rich countries and government-run investment funds may be adding “speculative heat” to the oil market.
  • Gold up $5.70 in the US. Down $8.20 in the US.
  • Bonds up with the 10 year yield down to 3.44% from 3.53%.

Bear Stearns are expected to have results tonight and we are also expecting to hear of an “in principle” takeover of the 85 year old company by JP Morgan.

Quiet day for news today … not a lot going on to start the week.

  • Banks doing it very tough again today – hitting fresh 52 week lows – after the sector took another hit in the US on Friday over the Bear Stearns liquidity issue. There are concerns that a collapse of Bear Stearns will have a ripple effect on all transaction they have been behind. CBA down 4.3% to 3807c, NAB down 5.4% to 2618c, WBC down 4.6% to 2194c and ANZ down 6.2% to 2025c.
  • Commonwealth Bank of Australia (CBA) has announced Warwick Negus, CEO of Colonial First: State Global Asset Management will be leaving the company on June 1 this year at the end of his 3 year contract.
  • Leighton Holdings (LEI) have announced the purchase of $260m of ConnectEast stapled shares at 115c. This is a sign of confidence in the Eastlink project – CEU announced in December that a $260m bridging facility would be replaced on completion of the Eastlink project by $260m of equity investment from LEI. Press talk over the weekend that LEI are planning a Russian/Mongolian JV and will soon announce a $1bn gas contract in India. LEI down 1.7% to 4157c. CEU down 2c to 122c.
  • Qantas (QAN) says it has kept, and will continue to keep, the market informed about fuel costs and that it doesn’t need to alter its profit forecasts. QAN down 7c to 2060c.
  • Rio Tinto CEO says its La Granja project in Peru is important but didn’t provide any details on its strategic plan. RIO down 1.6% to 12872c.
  • Rubicon Europe Trust Group (REU) has entered into a new lending agreement with Credit Suisse with a margin call of EUR9.9m due on March 18 being waived. REU unchanged at 13.5c.
  • WA News (WAN) CEO Ken Steinke and Chairman Peter Mansell will hold a press conference at 2pm to discuss key issues for the upcoming shareholders meeting. WAN down 45c to 985c.
  • Albidon (ALB) have announced “Multiple Uranium Targets Confirmed at Namakande Zambia”. ALB down 17c to 350c.
  • Eddy Groves says he has repaid all debts to his margin lenders. Citigroup was claiming $8.6m in Court. ABS down 9c to 145c.
  • Incitec Pivot is looking to enter the Chinese market via joint ventures once the acquisition of Dyno Noble has been finalised. IPL – who paid $3.3bn for Dyno Noble last week – has experienced a 30 to 40% increase in fertiliser order over the past 5 months and says trading conditions are extremely favourable. IPL up 3% to 13796c.
  • Billabong goes ex-dividend today – 27c ff

We have an FOMC Meeting tomorrow night – 64% chance of a 100bp interest rate rise. It is a short week this week. The market closes at 2.30pm on Thursday afternoon and re-opens after the Easter break on Tuesday morning.

In the MARCUS TODAY newsletter today we have updated PEs and YIELDS on the ASX 200.