The market is up 27: Doing better-than-expected after the negative session in the US — outperforming the 10 point fall predicted by the SFE Futures this morning.

The Dow was down 80. Up 54 at best. Down 194 at worst. 9 out of 10 stocks down. Only telecom stocks up 1%. The US government is giving the big banks the ability to access more funding support through the issue of preference shares to the government. Obama laid out broad plans for Wall Street regulatory reform. House builders down on the poor US house sales data. Bernanke confirmed that regulators were not planning to nationalize Citigroup. Financials down 0.5%. BHP and RIO down 3.65% and 4.07%. Metals up. Oil had a big bounce — up 7.2%. Gold down. Bonds down. A$ down.

ANZ to cut dividends: ANZ’s trading update this morning made it clear they will be the first major bank to bite the bullet and cut dividends. Despite that ANZ is up 3.0% on the news they will probably cut their dividend by 25%. The Trading update is ok with some reasonably optimistic comments in the conference call about the outlook for the credit markets in Australia and there are suggestions the slowdown will not be as bad as some expect. Asia strong. Goldman Sachs JB Were say they could well see a strong turnaround in earnings in 2010. Dividend news not good but there is a history of stocks performing quite well after “prudent” dividend cuts.

Macquarie has been getting thumped this year: Down 62% from 4329c in January to a low of 1625c today. They have dropped 33% in less than two weeks….and you can’t even short the stock(!). They have popped out an announcement this morning telling us that they are not about to have a capital raising. There are suggestions on the newswires that ASIC (the government) will once again extend the ban on shorting financials from its expiry date a week tomorrow (March 6th). The stock is attracting a lot of attention and trade at the moment.

  • Resources down 0.2% – BHP down 0.1% and RIO up 0.5% following a negative lead from the US miners.
  • Bendigo and Adelaide Bank down 4.2% having gone ex dividend.
  • Fortescue Metals down 6.4% as it starts trading again having pulled a $500m institutional placement with institutions unwilling to pay the 248c price paid by Hunan Valin.
  • OZ Minerals up 10% after big falls yesterday with their Friday $1.1bn debt rollover deadline looming and suggestions they are moments away from announcing a $425m sale of assets.
  • Pacific Brands are closing down their Australian manufacturing operations in Australia (7 factories) after 92 years and will be moving them offshore. They are sacking 1850 staff. Price up 11.4%.
  • Wesfarmers has completed their Retail Entitlement offer. There was a 60% take up.
  • Babcock & Brown Power (BBP) has had a profit warning.
  • Arrow Energy (AOE) – Pure Energy independent directors accept the superior BG offer. BG will now have a 29% stake in PES. Shareholders accept BG bid.

Results:

  • Telstra down 1.9% after posting 1H EBIT result slightly below consensus expectations. Sales result in-line. Sol Trujillo will leave in June.
  • Westfield (WDC) up 5% after posting an expected FY NPAT loss of $2.2bn after flagging last month that it would write down the value of the shopping malls it owns by about A$3 billion.
  • Origin Energy (ORG) posted strong 1H NPAT up to $6.66bn from $335m a year ago due to a $6.70bn sale of 50% of its CSG assets to ConoccoPhillips. Operating profit up 38% to $277m from $200m last year – slightly ahead of expectations. Downgraded its FY earnings guidance due to a recent steep fall in energy prices.
  • Lend Lease (LLC) posted a 1H NPAT loss of $596.4m compared to the profit of $250.9m last year. Loss due to asset writedowns and impairment charges. Operating profit was also down to $185.4m from $254.1m a year ago. Reiterating net operating profit in range of $380m-$400m for the FY.
  • Centro Properties (CNP) posted 1H NPAT loss of $2.4bn. 1H revenue was at $1.10bn. Loos due to property writedowns of $1.23bn and mark-to-market financial instrument charges of $1.12bn.
  • Tatts Group (TTS) posted 1H NPAT profit up 8.8% to $144.7m. Dividend to be 10c. Said 2H growth unlikely to match 1H.
  • Insurance Australia (IAG) posted 1H NPAT down 96% to $4m down from $110m a year ago – in-line with last week’s announcement. Revenue up 13% to $5.3bn. Fall in profit was flagged last week and was due to a significant fall in investment income on weak equity markets as well as a $100m loss on the sale or restructure of its underperforming UK mass market distribution business. Dividend only 4c – down from 13.5c last year.
  • Boart Longyear (BLY) posted FY NPAT up 93% to US$156.7m from US$81.1m. Sales of US$1.84bn, up 17% from US$1.58bn a year ago. Downgrades October’s guidance for revenue growth of 22% to 17% for the FY. Cut’s dividend completely compared to last years 1.5c.
  • Toll Holdings (TOL) posted 1H NPAT down 33% to $158m from $236.7m as they divested a number of business units. Revenue up 30% to $3.51bn from $2.70bn when adjusted for continuing operations – declared an interim dividend of 11.5c down from 13.5c a year ago.
  • Ramsay Health Care (RHC) posted 1H NPAT up 5.5% to $53.8m from $50.9m a year ago. Seems in-line and solid. Revenue from continuing operations up 35.5%. Interim dividend to be 16.5c compared to last year’s 15c.

Other Items:

  • Suggestions Asciano will sell Patrick stevedoring to cut its $4.6bn of debt.
  • Worley Parsons getting a good write up after results yesterday. Stock was up 9.55% yesterday.
  • 4Q capex was much stronger-than-expected which suggests the economy could avoid contraction for the quarter. Up 6% verses the 3.3% fall expected. FY09-10 investment estimate by company owners will lift investment by an expected 0.6% — seems much better than economists were expecting.

The Dow Jones futures suggest a 60 point rise on Wall Street tonight. 

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

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