The market is down 50 points. Resources down 3% following the US lead down on lower commodity prices and financials down 0.5% after more negative financial news out of the US overnight.

Dow index down 40. Up 18 at its best and down 67 at its worst. Volume was up. Four out of ten sectors finished higher. Financials struggled after Citigroup went to the market to raise another $3bn and Countrywide posted $893m loss.

More than 100 companies reported earnings – mixed results. Commodities posted sharp declines of 1.9% as oil fell 2.9% and gold 2.6%, partly due to the USD index rising 0.52%. Materials sector down 3.1% as traders took profits as commodities fell. Energy down 1.5%. Commodities still up the most this year, with energy up 1.6% and materials up 0.9%. FOMC meeting coming up as well as 1Q GDP figures. Fed likely to cut rates by 25bp. Economists are starting to worry about inflation in the US and how the consumer will cope with rising oil and food prices. Big night on the economics front. Consumer confidence index fell to 62.3 in April, down from the revised 65.9 in March and the 76.4 in February – 4th consecutive month of declines – less than expectations (which is good) but the lowest since the 61.4 in March 2003 just before the Iraq war. Case-Shiller home price index fell 13% in 1Q – the number of homes in the US moving towards foreclosure more than doubled in the 1Q from that of a year ago. Up 112%. Citigroup was down 3.4% and Merck & Co fell 10.4% as the food and drug administration knocked back the approval of their new cholesterol drug, Cordaptive.

  • Both BHP and RIO down in ADR form on Friday, 3.79% and 4.57% respectively. BHP down 165c to 4224c. RIO down 496c to 13622c.
  • Metals all down overnight – Nickel down 2.2%, Zinc down 2.9% and Aluminium down 1.6%. Copper down 1.3%. Zinifex down 15c to 992c.
  • Oil price down $3.11 to $115.67 after a monthly Energy Department report said demand for finished petroleum products dropped 8.5% in February from January. Woodside down 148c to 5540c.
  • Gold down $18.70 to $876.80. Newcrest down 54c to 2696c.
  • US Bonds up with the 10 year yield down to 3.82%.

Origin Energy (ORG) announced it has received a takeover proposal from BG Group. Offer – 1470c cash per share or $12.9bn – 40% premium to last nights closing price of 1047c. The board is yet to consider the proposal and have advised shareholders to take no action. Proposal subject to shareholder and regulatory approval. ORG up 396c to 1443c.

Making the news today…

  • Australian Worldwide Exploration (AWE) posts 2008 quarterly – revenue up due to higher oil prices to $258m, up from $222.7m last Q. FY production expectations at NZ’s Tui project raised 13 million barrels of oil. AWE down 5c to 359c.
  • RIO Tinto (RIO) set to expand its Corumba Brazil iron ore mine, one of the world’s most valuable iron ore deposits. RIO down 496c to 13622c.
  • Centro Properties Group (CNP) is in a trading halt ahead of an announcement, as it faces the Wednesday deadline to refinance $5.4bn of debt – it is under pressure to sell assets to raise the cash.
  • Lihir Gold Ltd (LGL) 1Q results posted a 28% fall in production on year, due to rain and shovel availability hampering mining. LGL down 2c to 291c.
  • Leighton Holdings (LEI) has been awarded a US$435m in new project contracts in partnership with the Tourism Development & Investment Company as part of a series of major projects to turn Abu Dhabi into a world class tourist destination. LEI down 22c to 4628c.
  • Macquarie Airports (MAP) 1Q 2008 results for Brussels Airport post EBITDA up 19.6% to EUR43.4m. MAP down 10c to 309c.
  • Equinox Ltd (EQN) released a positive report regarding the uranium feasibility study at its Lumwana north west Zambia copper project. EQN down 11c to 495c.
  • ANZ Banking Corp (ANZ) announces that its exposure to Opes has increased from $650m to $700m. ANZ down 17c to 2189c.
  • Lots of broker downgrades for Aristocrat (ALL) after their AGM yesterday. Macquarie Equities cut the stock to Neutral from Overweight but says “From a value perspective ALL remains in very attractive territory”.
  • Westpac Banking Group (WBC) struggling ahead of its interim result tomorrow, down 2.2% to 2495c. Analysts’ on average are expecting a 1H cash profit of $1.83bn, up from $1.68bn.

In today’s newsletter, we have an article titled “Bachelor of Science” discussing whether it’s appropriate for someone to put their qualifications on their business card.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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