The market is down 12, dropping off as the morning progresses — underperforming the 14 point rise predicted by the SFE Futures this morning. Resources pumping — up 4.2% – most the other sectors are down. BHP and RIO both up about 5.2% and 7.1% early on. Fortescue Metals up 9% on the open. Most the miners up on the strong base metal prices and a strong performance in the sector in the US overnight. Gold stocks strong on the higher gold price. Industrials down 3.6% — Lend Lease has placed $302m of shares overnight at 605c and fallen 17.2% to 560c putting the placees over $20m underwater. Qantas’ capital raising went through near the bottom end of the placement range at 185c and the price is down 17% to 190c this morning. Placees are just above water. Leighton Holdings up 2.7% on the back of winning a $475m contract in Abu-Dhabi.

Banks down between 2 -4%. UK banks had a bad night and there are concerns over Obama’s plans for financial resurrection. NAB appointed John Walker to the board.

The Dow was down 113. Down on banking fears and poor company results. Financials down 1% — fears surrounding Obama’s plan to stabilize the banks. January’s ADP Employment figures show fewer-than-expected jobs were lost. Service sector shrank less-than-expected in January. Materials up 1.5% buoyed by precious metal stocks. Consumer discretionary sector down 2.5% — Costco Wholesale slid 6.6% after saying their 2Q09 earnings will be “substantially lower” than analyst’s estimates. Consumer staples down 2.6%. Disney fell short of 4Q consensus. Kraft posted results below expectations and lowered guidance. Metlife beat consensus earnings in the 4Q.

Macquarie Bank have held their analyst briefing this morning. The stock was down 7.5% yesterday in anticipation and is up 3.5% first thing this morning as they downgrade earnings guidance because of writedowns but excluding those the trading performance is pretty much as expected.

Reaction to BHP’s result positive – up 5% early on – up 3.4% in the US overnight. Kloppers said he was very pleased with the result, and that “…momentum and risk in commodity prices was on the downside not only in the short term but (as of now) in the medium term as well…” Needs the OECD as well as China to perform. Didn’t deny suggestions they might want to buy RIO’s stake in Escondida.

  • Suncorp Metway (SUN) is in a trading halt as it plans to conduct a capital raising — didn’t say how much it wants to raise.
  • Rio Tinto (RIO) complete the sale of US$850m of potash assets to Vale.
  • APN News & Media (APN) sold its New Zealand-based online business directory, FindA.co.nz, to New Zealand Yellow Pages.
  • Web Jet (WEB) up 10% on the release of its half year result.
  • Goldman Sachs JB Were has a positive view on iron ore this morning which appears to have lifted all boats in the sector. Fortescue up another 8%.

OTHER NEWS…

  • The Government stimulus package went through to Senate. Main beneficiaries from a stockmarket point of view are discretionary retailers (HVN, BJH, DJS, WES, WOW), infrastructure beneficiaries which includes a host of builders and contractors, and CSR and Fletcher Building for their domestic insulation products.
  • The Dow Jones Futures suggest a 32 point fall on Wall Street tonight.

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