The market is struggling today — we are down 76 — Down 128 points at worst, down 43 at best on the back of heavy falls on Wall Street. We are expecting a decision on the Stabilisation Bill tonight in the US. Resources underperforming. You know resources are in for a rough day when the two big boys — BHP and RIO — fall over 10% in the ADR form overnight — both down 4.1% and 4.6% this morning. Resources down 4.0% across the board. Healthcare sector they only one putting some gains on. Financials down 1.1% and Property Trusts down 1.0%.
Dow down 348. Down all session — down 392 at worst. Financials down 4.3%. Credit spreads (borrowing costs) jumped and remain at all-time highs. Economic data reinforced a worsening economy — a jump in weekly unemployment benefits did some real damage. Markets questioning how effective the Stabilisation Plan will be if/when/and in-what-form it passes through the House. Resources plummet 8%. BHP and RIO down 11% and 14%. Oil down. Metals all down. Gold down. The SEC extended its ban on short selling until October 17th so that it expires after the Stabilisation Plan is enacted (if it is). The market for commercial paper droped to the lowest level on record — banks and insurers are unable to find buyers for the short-term debt.
- Both BHP and RIO down significantly in ADR form, 10.8% and 13.9% respectively. Both were down a bit over 7% in the UK.
- Metals all down — Zinc down 5.22%, Copper down 4.95% and Aluminium down 4.69%. Nickel down 4.07%.
- Oil price down $4.39 to $93.87 — down for the second straight session — on concerns about the health of US businesses. Last nights fall meant the price of oil is actually down for year by 2.3%.
- Gold down $43 to $844.30
- Bonds up with the 10 year yield down to 3.63%.
Making the news today…
- Stockland Group (SGP) has provided an update of its UK operations — it expects to break-even on its UK operations due to the deteriorating UK economy. It had originally expected to make a $20m profit. SGP down 12c to 568c.
- Incitec Pivot (IPL) struggling today — down 9% to 423c — on the back of shares in US rival Mosaic falling 41% overnight after warning the price of phosphate was coming off after spiking in previous quarters. Macquarie Equities maintain their Outperform recommendation on the stock and their 944c target price — 123% above the current share price.
- Woodside Petroleum (WPL) has produced its first gas at the $1.6bn Angel platform at the North West Shelf Venture. WPL is the operator of the North West Shelf and has an equal share with 5 other joint partners. WPL down 3.4% to 4975c despite the announcement.
- Gunns (GNS) announced the completion of a retail entitlement offer to shareholders raising $1.4m. Pitiful amount — not a big surprise though. GNS up 1.5c to 124c.
- Transpacific Industries Group (TPI) — down 30c to 603c — said the placement of around 6.7m shares at 600c each will be used for general corporate purposes.
- Panoramic Resources (PAN) — down 12c or 9.2% to 118c — it upgraded its nickel reserves at its Savannah mine to 2.9m tons at 1.29% nickel.
- ABN AMRO upped their recommendation on Consolidated Media (CMJ) to BUY from Hold despite cutting their target price to 284c from 300c. According to their figures, their valuation is now around 40% above the current share price. CMJ down 10c to 216c.
- Transfield Services (TSE) has been cut to HOLD from Buy by Citi. They also cut their target price on the stock to 850c from 1055c after cutting their FY09 and FY10 EPS forecasts by 7%. TSE down 11c to 479c.
- Credit Suisse cut Boral (BLS) to Underperform from Neutral and their target price to 630c from 660c saying “short term earnings improvement appears unlikely”. BLD down 12c to 627c.
- The Dow Futures are suggesting a 23 point rise on Wall Street at midday ahead of the Bailout Bill hopefully — fingers crossed — being passed.
- Quick reminder that as of Monday, Melbourne, Sydney and Canberra move to daylight savings. Western Australia in three weeks. Clocks move forward one hour.
- Monday is a public holiday in NSW — market is open but it’s a non-settlement day.
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