The market is down 82 and falling after being up 48 points at best – underperforming the 14 point rise predicted by the SFE Futures this morning. Bit quiet on the announcement front.

The non-financial shorting ban was lifted yesterday at the close – industrials like Woolworths, Westfield, CSL, Brambles, Orica, Leighton Holdings, Qantas and Toll Holdings haven’t been sold-off this morning as feared – they saw heavy selling yesterday in anticipation of the ban-lift and previous outperformance.

Banks were all up this morning but a falling into negative territory at midday after heavy falls yesterday. Macquarie Group up again today after their solid results and positive commentary from the brokers this morning. Babcock & Brown down 24.2% after their satellite B&B Infrastructure looks to sell a sizeable chunk of their Dalrymple Bay port facility.

The Dow was up 151. Up 204 at best. Down 168 at worst. Main Points: Treasury’s Paulson, the Fed’s Bernanke and the FDIC’s Bair testified before the House Financial Services Committee regarding the $700bn TARP package. Paulson says NO to the $700bn being used for an auto bailout and defended the TARP package’s success at staving off an international financial collapse. Bernanke said the credit markets still strained, but has improved. Negative house price data across US cities – medians drop 9% last quarter from a year ago. Lowest-ever builder’s sentiment about a short-term recovery in the housing market. PPI Inflation figures have eased on falling energy prices. General Motors and Ford at multi-decade lows. Technology sector outperforms (up 1.0%) with surprise positive 3Q performance from Hewlett-Packard. Financials underperform – down 0.8%. Retailers down 0.2%. Oil down 1.31%. Metals all solidly up. Gold down 1.25%. A$ up 0.52% against the US dollar. BHP and RIO down 0.2% and 0.8% in ADR form.

Making the news today…

  • Babcock & Brown (BNB) has provided an update on its strategic review – It will narrow and simplify its focus by becoming a specialist infrastructure investor. It provides no timetable for asset sales but said it will repay debt through sales of assets and is looking to repay over 50% of its debt facility by 2011.
  • AWB Ltd (AWB) has announced a $64.3m profit, up from $270.1m – analysts’ expected $53.75m on average. Revenue increased by 46.5% to $6.84bn.
  • CSR Ltd (CSR) has raised $315m via an institutional capital raising to reduce debt. It comprised of around $125m through an institutional placement of 89m shares at 140c a share and around $190m through a non-renounceable 1-for-4 entitlement offer for institutional shareholders that issued 136m new shares at the same price.
  • Albidon (ALB) is in a trading halt – it is reviewing its financial position.
  • Oz Minerals (OZL) has warned of lower profits and possible assets write-downs. It will also lower earnings in 2008 on a pro-forma basis.
    Macarthur Coal (MCC) CEO Nicole Hollows says the company is on track to meet guidance but a sharp fall in global steel production is set to impact demand for raw materials over the quarter.
  • Cockatoo Coal (COK) has provided an update on its Wiggins Island Coal Export Terminal project.

Broker Stuff today…

Plenty of broker stuff this morning after Macquarie Group (MQG) announced its 1H profit result yesterday – was in-line with expectations but they impressed with their 2H outlook saying it would be in-line with 1H. ABN AMRO cut target price to 4500c from 6350c but maintain their BUY recommendation, GSJB Were upped their recommendation to BUY from HOLD with a 3684c target price, UBS Warburg are NEUTRAL on the stock and maintain their 2780c target price. J.P. Morgan maintain their OVERWEIGHT recommendation and 4000c target.

Other Stuff today…

  • The leading index of Australian economic growth shows the economy grew at an annualized rate of 1.1% in September, well down from 3.5% reading in August.
  • The Dow Futures suggest a 71 point fall on Wall Street tonight.  

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

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