The market is struggling — down 155 or 3.6% – on the back of heavy falls on Wall Street overnight. The Faith-o-meter has hit rock bottom again. Resources doing most of the damage — BHP down 7% and Rio down 8.3% — they have lost all of yesterday’s big gains. ANZ has gone 74c ex dividend.

Wall Street had a shocker overnight – Dow Jones closed down 486. Down all session — down 513 at worst. It seems the end of the US Election marathon fails to add any certainty. Weak economic data for employment and services sector highlighted weakness in the real economy. Investors nervously await economic data tomorrow — Government jobs numbers, October same-store-sales, weekly initial-jobless claims, and preliminary 3Q productivity reading. All sector struggled.

ABC Learning (ABS) has appointed voluntary administrators — share trading to remain suspended. They say the action was taken after the Directors carefully reviewed the company’s future.

It is Oaks Day (another Race Day) in Melbourne today. A lot of the City heads off at lunchtime if not before.

In the news today…

  • Telstra (TLS) has held its Strategy Day and says it remains on track to achieve its growth forecasts and reiterated its 2009 earnings guidance. They expect a 6-8% increase in earnings before interest and tax and a 4% rise in revenue. The stock has outperformed the market this year, down 10.8% compared to the 32% fall in the ASX 200. TLS unchanged at 418c.
  • Leighton Holdings (LEI) has provided guidance at its AGM. According to GSJB Were, their wording changed to “15% growth” from “at least 15%” and is considered a slight softening. 1Q09 was negatively impacted by the deteriorating listed asset values and 1H09 NPAT is expected to be “similar to the previous period”. GSJB Were say HOLD but have a 4500c target price compared to the current share price of 2731c. LEI down 4.7% to 2730c.
  • News Corp (NWS) has hit an 11 year low — down 20% to 1285c — after announcing overnight a 30% fall in 1Q earnings and warned that its FY09 operating earnings will struggle due to the financial crisis. A heap of broker downgrades are expected tomorrow morning.
  • Iron ore stocks struggling along with the rest of the market after the world’s biggest steelmaker ArcelorMittal announced it’s would undertake major production cuts. Fortescue Metals down 6.6% to 284c.
  • United Group (UGL) has won $400m in new contracts taking its order book to a record $8bn. UGL down 40c to 1080c.
  • Fosters Group (FGL) reports that Molson Coors Brewing Co has built up a 5% stake in FGL. More fuel for the takeover talk fire. FGL up 22c to 607c.
  • The ANZ Bank (ANZ) has added $79.7m to its 2010 and 2014 notes. It will be used for general purposes. MGR up 31% to 127c.
  • Mirvac Group (MGR) is out of a trading halt and doing well after its $500m equity raising. Macquarie Equities says with a few problems now addressed, they expect the stock to trade closer to fundamental valuations.
  • Transpacific Industries (TPI) says it aims to continue cutting debt in FY09 and expects FY09 EBITDA growth of 13-16%. TPI down 4c to 446c.
  • Seven Network (SEV) is not interested in neither a joint or solo bid for APN News & Media (APN) despite The Australian naming them as a possible bidder. SEV down 12c to 563c.
  • Oil Search (OSH) says buyers interest in its LNG project remains strong.
  • Commonwealth Bank of Australia (CBA) says it has a $170m exposure in the struggling AFG.
  • Monadelphous (MND) has been awarded a $76m contract at Abbot Point Coal Terminal.

Broker stuff today…

  • ABN AMRO likes the look of Ansell (ANN) saying it remains “an excellent defensive stock and we reiterate our Buy recommendation” and upped their target price to 1484c from 1345c.
  • Lots of broker downgrades for West Australian Newspapers this morning on the back of their profit result yesterday. JP Morgan cut their target price to 650c from 869c and UBS Warburg cut theirs to 675c from 875c. Kerry Stokes suggested WAN might have to stop paying 100% of its profits as dividends because of the difficult financial conditions. WAN down 44c to 625c.
  • CSR announced results yesterday — GSJB Were says HOLD and has a 230c target price describing the stock as reasonable value at current prices. CSR down 6c to 218c.

Other stuff…

  • Australia’s unemployment rate remained steady at 4.3% in October.
  • The Dow Futures suggest a 109 point fall on Wall Street tonight.  

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

For a free 21 day obligation free trial of the MARCUS TODAY newsletter (and no we won’t ask for a credit card number) please START A FREE TRIAL — you will receive two daily emails about the stockmarket, our MORNING EMAIL with all the stuff you need to know ahead of the trading day ahead and a DAILY EMAIL with all the midday events, news, comments and Ideas from Marcus and his Team.

You will also be given a password to the MARCUS TODAY website including access to all the emails as well as Educational, Entertaining and Researched Articles from Marcus and his Team and an archive where you can catch up on a whole week or month in just a few minutes. Or Browse at length. We are sure you will enjoy and profit from what we offer.

Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW