The market is having another shocker — down 153 or 4% – on the back of heavy falls on Wall Street overnight. Resources are doing most of the damage — down 6.5% overall — BHP down a big 8% and RIO down 4.7%. All the big four banks are struggling as well. Macquarie Group down 7.4%. Asciano which fell 70% on Monday is up 40.9% today.

Dow down 411. Down all session — down 426 at worst — declined all session and closed on low. Henry Paulson comments at a news conference that the government won’t be spending the $700bn bailout package buying toxic debt off the banks but will be using it to inject capital into institutions offering securities backed by credit card debt, student loans, auto loans, housing and government agency debt. Motor industry still under pressure and the Energy Department said fuel consumption is likely to fall harder than anytime since 1980 next year. JP Morgan says the US recession could be worse than the credit crisis. “We think (the recession) could be deep; we don’t know how deep…We think the economy could be worse than the capital markets crisis.” The NASDAQ was down 5.19%.

The Government are expected to outline changes to short selling legislation today as well as reforms to the regulation of credit rating agencies. Expect draft legislation suggesting covered short selling needs to be disclosed to the market and an extension of the ban on naked short selling.

According to the AFR, BHP Billiton might entertain the idea of spinning off some iron ore assets to appease the European Union regulator’s concerns over the Rio Tinto takeover.

Making the news today…

  • Commonwealth Bank Australia (CBA) down on the back of their trading update. 1H earnings will be impacted by loan impairment charges for its exposures to the likes of Allco Finance and ABC Learning. Said the exposures, along with the Lehman’s exposure will “will result in significantly higher first half provisions”.
  • Lend Lease (LLC) struggling — they announced a $490m writedown against property values and sales. They reiterate earnings guidance for a 10-15% drop in net operating profit.
  • Woodside Petroleum (WPL) said it would like to invest in a liquefied natural gas project planned to be built in Papua New Guinea by a consortium led by Exxon Mobil.
  • Mount Gibson Iron (MGX) announced it has reached an in principle agreement with the Dambimangari Native Title Group to allow exploration work to be carried out at Koolan Island in WA.
  • St. George Bank (SGB) warned that earnings growth is expected to slow as the economy goes backwards. SGB shareholders vote on the WBC takeover offer today.
  • Abacus Property Group (ABP) says it has no idea why the share price is down 53% in the past month.
  • Austereo Group (AEO) says earnings for the half year are expected to be “slightly below” last year’s results due to lower revenue.
  • Sonic Healthcare (SHL) has raised $425m in a share placement to part fund potential acquisitions. The share sold at 1160c, an 11% discount to the traded price.
  • TABCORP’s Holdings (TAH) casino division CEO resigns.
  • News Corp (NWS) has appointed Gerald Banker as Deputy Editor-In-Chief of The Wall Street Journal.
  • Fairfax Media (FXJ) told shareholders at its AGM that 1Q earnings fell around 15% from last year and conditions are likely to remain tough.

Broker stuff today…

  • A heap of broker stuff this morning on Westfield (WDC) after their investor briefing — Merrill Lynch cut their target price to 1790c from 1900c and maintain BUY recommendation. ABN AMRO also cut their target price to 1559c from 1733c and maintain their Hold recommendation.
  • Incitec Pivot has had its target price cut by just about every broker on the back of their generous capital raising. Most brokers maintain their positive recommendations and suggest shareholders take up the offer.
  • UBS Warburg cut their target price on Alumina (AWC) to 180c from 300c after lowering their aluminium price forecasts and predict a loss for 2009.

Other stuff…

  • GSJB Were expect “plenty” of more share issues in the next month.
  • The Dow Futures suggest a 50 point fall on Wall Street tonight.

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