Extremely disappointing day — down 113 — the SFE Futures suggested an 83 point fall. It is the fourth consecutive day that the market has gone backwards. Resources doing most of the damage. BHP and RIO down 5.7% and 10.2% respectively. Financials down 2.5%. Energy stocks thumped.

Dow down 184. Down all session — 207 at worst. US Financials fell the most — down 5.2%. Energy and materials down on lower energy and commodity prices. US Retailers down on the surprise fall in April retail sales figures. Home foreclosures up. US Cyclical stocks and industrials down over 4% each. Only pharmaceutical stocks up. BHP and RIO both down in ADR form overnight — 5.26% and 9.19% respectively. Gold up $2.

RIO LOOKING AT A RIGHTS ISSUE — London’s Daily Telegraph reported last night in an article entitled “Rio Tinto slides amid talk of £5bn cash call” that Rio Tinto is considering a rights issue to replace its $US19.5bn Chinalco deal. The stock was off 4.7% in our market yesterday. RIO has apparently drawn up plans for a $6.56bn raising underwritten by JP Morgan, Cazenove and Credit Suisse. The Chinese rescue package looks much less appealing now that credit markets have improved with billions of dollars recently raised. Plenty of rumours around — one is that the FIRB will block the Chinalco deal. The other is that both BHP Billiton and RIO are putting together an alternative iron ore merger.

  • Leighton Holdings (LEI) down 6% having downgraded FY09 NPAT guidance 10% from $480m of $430m.
  • Fairfax Media (FXJ) down over 8% on having their long-term credit rating downgraded by Standard & Poors. FXJ also said they expect an extra $10m interest charge in FY10.
  • Macmahon Holdings (MAH) to raise $60m in a share placement to reduce debt and for working capital.
  • Western Areas (WSA) placed 7m shares at $5.05/share (3.6% discount) to raise $35.35m to support its rapidly expanding nickel production.
  • Arrow Energy (AOE) complete their $10.5m capital raising.
  • Downer EDI (DOW) was selected as the preferred alliance partner for Solid Energy’s NZ mine.
  • Lend Lease (LLC) notes it will continue the management of the London Olympic Village.
  • Singapore Telecommunications (SGT) post a solid result with FY09 NPAT at $3,455 ahead of consensus.
  • AMP Limited’s (AMP) Chairman and CEO address at their AGM noted they expect tough market conditions in 2010.
  • SP AusNet (SPN) raised $333m in their well subscribed institutional entitlement offer – may raise up to $80m from the retail offer.
  • Gloucester Coal (GCL) take their stake in Whitehaven (WHC) to 26%.

Other…

  • CBA rated with 2 HOLDS and 2 SELLS by brokers this morning after yesterday’s 3Q09 trading update and 25% dividend cut.
  • Patersons Securities initiates Westfield (WDC) as a BUY with an 1100c target — notes WDC is fully funded for the next three years.
  • UBS lifts Stockland’s (SGP) price target to 265c from 240c after their capital raising — maintains SELL recommendation.
  • VIX Volatility (fear) index up 5.82% or 1.85 to 33.65 overnight.

The Dow Futures suggest a 4 point rise on Wall Street.

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