The ASX 200 is up 47. That compares to Wall Street being up 164 and the 43 point rise predicted by the SFE Futures this morning – we were up as much as 70 points early on. Bit quiet. Resources up 1.7% – BHP and RIO up about 2.0%. Oz Minerals is up 3.5% after 4-months of heavy losses on the back of falling zinc and copper prices. Financials not finding any solid support — only up 0.3% — as uncertainty spreads through the financial sector from Fannie Mae and Freddie Mac to Lehmans with talk that Merrills (down 16% overnight) may be next. Who knows who’s next, the uncertainty is the problem.

The Dow was up 164 last night. Up 177 at best — down 170 at worst. Massive volatility still — rallied 170 points in the last half hour. Financials initially smashed on concerns over Lehman’s future — sector down 4.7% early on but closed up 1.7% on rumours that the Bank of America was going to bail them out. How many times will the US rally hard on a failure being rescued? Lehman still closed down 41%. Oil fell to below $101 per barrel helping transport related stocks close 4.4% up — United Airlines up 11.5%, CXS up 11% on an earnings forecast upgrade, and General Motors up 12%. Oil and gas refiners up 8.3% on widening ‘crack-spreads’ (profit margins btw crude and gasoline) — Valero, Tesero and Sunoco up about 7%, 8% and 13%. US dollar mixed against other currencies and down 0.12% against the Aussie. A$ at 80.20c this morning. Metals were up moderately except for nickel and aluminium which closed slightly down.

  • Both BHP and RIO down in ADR form overnight, 1.43% and 0.13% respectively. BHP up 93c to 3540c. RIO up 253c to 10408c.
  • Metals mixed overnight – Zinc up 2.66% and Copper up 1.44%. Nickel down 0.04% and Aluminium down 0.12%.
  • Oil price down $1.71 to $100.95 after the US dollar strengthened further. Woodside up 105c to 5313c.
  • Gold down $17 to $745.50. Newcrest up 66c to 1926c.
  • US Bonds unchanged with the 10 year yield to 3.63%

Wayne Swan told 2UE radio station the strong jobs numbers yesterday won’t alter the RBA’s policy of loosening interest rates given the state of the strained domestic economy.

Not a lot of major news:

  • Arrow Energy (AOE) says they have reached a definitive agreement with energy partner Royal Dutch Shell and will get an extra $140m from the deal due to recent currency movements.
  • Ausdrill’s (ASL) MD Ron Sayers has upped his stake in the company on the back of hedge fund selling pushing down the share price. ASL has been sold off after Macmahon Holdings (MAH) CEO reportedly said their takeover for ASL was unlikely to succeed.
  • Aristocrat Leisure (ALL) announced Nick Khin – the current boss of its European operations — will replace Tim Parrott as head of its U.S business. Despite the profit downgrade, the stock is up 28% in the past 30 days on the back of the US strengthening.
  • Leighton Holdings (LEI) has been awarded another contract, $125m for works on the Worsley Alumina project in WA.
  • The Sydney Morning Herald says the delays with ABC Learning (ABS) releases its FY08 result is not because its going broke, but because of the task facing ABC’s auditor, Ernst & Young.
  • Citi say they are waiting on evidence that ALL will turn around and say they prefer Crown (CWN) as their best exposure to Macau. They say BUY and add that full value won’t be unlocked until City of Dreams is operations.
  • Murchison Metals (MMX) has accepted SinoSteel’s offer for its 9.2% stake in Midwest (MIS). Its acceptance means an extra $135m and ups Sinosteel’s stake to 70.2%.
  • Woolworths (WOW) could yet still get a chance to make a further takeover bid for NZ’s Warehouse as WHS reviews its large format Extra stores, potentially clearing a legal path for a takeover to occur.
  • AGL Energy (AGK) is being pitted by Merrills to be able to use the proceeds of its expected sale of PNG and Elgas assets to buy NSW electricity assets, Babcock and Brown Power’s assets or make a $500m buyback.
  • Marion Energy (MAE) announces more delays expected at its Clear Creek project due to high levels of hydrates experienced in the gas reservoirs.
  • Western Areas (WSA) has signed a JV agreement with Mustang Minerals too explore the East Bull lake Nickel-Copper Project in Canada. WSA up 0.35%.
  • Sigma (SIP) CEO Elmo de Alwis says that SIP hasn’t been approached by Metcash or Sanofi-Avantis about a break-up play on the group despite the rumours.
  • MQG up 4.2% today after recent heavy falls – has lost 20% in the last 5 weeks. This is despite press comment that they have a potential $500m exposure to the disastrous BrisConnections toll road. Was down 3.2% yesterday, 2.9% the day before and 6.4% on Tuesday.
  • Babcock & Brown down 10% today on no news. They were down 20% early on hitting a record low of 187c. They were down 15% yesterday. They have had the opposite of a speeding ticket but say they can’t explain the price fall (saying its because Lehman the 4th largest investment bank in the US fell over is a bit too obtuse).

Lehmans down another 8% in after hours trade. Dow Futures…for what they’re worth are down 24 at the moment. More than usual.

MARCUS PADLEY is the Author of the MARCUS TODAY

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