The market is up 25. Financials flat (except for Babcock & Brown up 3%) and resources leading the way up 1.8%.

Dow up 48. Dow was up over 100 early in the session. Dow Jones establishing itself above 13,000 at 13,058. Longest winning streak for 7 months. Jobs report better than expected. The unemployment rate dropped from 5.1% to 5.0% (expected 5.2%) with payroll numbers down 20,000 against forecasts for a fall of 75,000 and an 81,000 fall last month. It suggests the current recession will be more mild than the 2001 recession. The Fed increased the Term Auction Facility from $100bn to $150bn and relaxed collateral requirements. One commentator saying we will recover 2007 year highs before the end of the year. A good open on the back of the economic numbers was killed off by poor results from Sun Microsystems (down 23%) and some Friday profit taking after a good week. The market did well to hold onto its levels considering the 190 point gain the day before. Berkshire Hathaway held its AGM and announced Q1 results down 64% with earnings 13% below expectations of $1,247 per share compared with forecasts for $1,430. Price down 0.2% on Friday. Energy sector up 1.2% on better than expected Chevron results and a 3.5% jump in the oil price.

Microsoft has withdrawn its $33 bid for Yahoo! after Yahoo! asked them to pay $37. Some suggestions they will now go hostile. Yahoo! likely to plummet tonight.

The Dow Futures are down 47 at the moment and have had a sharp reversal from being up 56 earlier this morning.

  • Both BHP and RIO up in ADR form on Friday 5% and 4.39% respectively. BHP up 102c to 4444c. RIO up 214c to 14040c.
  • Metals all up on Friday – Copper up 2.3%, Nickel up 2.2% and Aluminium 2.7%. Zinc up 1.4%. Zinifex up 23c to 998c.
  • Oil price up $3.76 to $116.36 after Turkish airstrikes on Kurdish rebel bases in Iraq ignited supply concerns. Woodside up 140c to 5840c.
  • Gold up $7.10 to $858.00. Newcrest up 74c to 2834c.
  • US Bonds down with the 10 year yield to 3.85%.

Main stories

  • Incitec Pivot Ltd. (IPL) 1H report out – 1H profit trebled to $169.8m, up from $57.2m a year ago. Mostly due to record global fertilizer prices and cost cutting through a major restructure. 1H sales up 38% to $749.3m on year. Incitec stock has risen 50% in the year to date, compared with the benchmark S&P/ASX 200 index’s 11.2% decline. IPL up 447c to 17597c.
  • Macarthur Coal Ltd (MCC) said it has no formal proposal to announce although they continue to engage in talks with a third party. Said they’d need considerable time to complete talks. The Wall Street Journal reported on Friday that Switzerland-based mining giant Xstrata was in takeover talks with Macarthur Coal, citing unidentified sources. MCC down 20c to 1755c. Patersons Securities research today says “the coal price and takeover premium has been largely priced-in already”. They have a HOLD and a 1670c target price.
  • Leighton Holdings’ (LEI) Theiss Indonesia wins $US250m, 5yr coal mining contract with PT Inkor Prima coal – work due to commence in June. LEI up 107c to 4838c. It is their third substantial contract announcement in a week.
  • Nexus Energy Ltd (NXS) said merger with Anzon Australia Ltd is not going ahead. Couldn’t agree on revised terms after Basker-6 well produced worse-than-expected results. NXS up 9c to 159.5c. AZA down 20% or 31c to 115c.
  • Toll Holdings (TOL) – NZ government to buy back rail and ferry assets from Toll in order to rejuvenate NZ’s rail network which has been in decline since privatization in 93. TOL up 19c to 822c.
  • QBE Insurance Group Ltd. (QBE) – AFR reports that QBE will extend deadline for $8.1 billion takeover bid of IAG by a few days – it closes at 5pm tonight. Talk that QBE will eventually pay 20 to 30c more that the bid which is currently worth 428c against IAG at 442c.

Comment from the JP Morgan CEO – “We can only speculate how deep and how long the recession in the United States will really be and how that in turn will impact banks .. But we are not done with the crisis for a long time”.

The Diary for the week is in MARCUS TODAY today. RBA Meeting tomorrow. St George and National Bank interims on the way. We look at the Bank sector numbers and comment on the Wesfarmers rights issue and what to do about it. We also have a write up on the Berkshire Hathaway AGM at the weekend with the usual dose of profound entertainment from Warren Buffett.