The market is up 48. The SFE Futures were up 30 this morning.

The Dow Jones closed up 53 overnight and was up 153 at best and down 32 at worst. The Dow is now back in positive territory for 2011, but remains down 9.3% from its April 29 high. The ADP employment report showed a lower than expected private sector job gains. Economist Nouriel Roubini said the odds of a recession next year are 60%. It’s worth noting that European stocks recorded their worst month since 2008. German stocks had their worst drop in 9 years, down 19% in August. Metals were up on the LME, the oil price fell 9c to $88.81 and Gold put on $1.90 at $1831.70.

Today’s news and results…

  • CSR Ltd (CSR) — Trading Update — They said 1st half net profit (before significant items) will increase by around 10% on last year to $44.4m, reflecting an improved balance sheet and lower net interest costs. They also announced a restructure of their glass business saying it faces a downturn in both residential and commercial construction this half year and strong $A. CSR down 6.5% to 242c as a result.
  • Telstra (TLS) up 4c to 307c after announcing they are working with the ACCC about their structural separation plans ahead of the implementation of a NBN.
  • Leighton Holdings (LEI) will be hit with a $400m shareholder class action related to its handling of profit downgrades and a shock $1.2 billion write-down on key projects. Leighton is said to have misled shareholders and breached the continuous-disclosure rules in the timing of its announcement of cost blowouts and project delays at its $2.5bn Wonthaggi desalination plant, Brisbane’s $4.2bn Airport Link and its Middle East operations. LEI up 1.7% to 2064c.
  • Rio Tinto (RIO) said Chris Lynch, the current CEO of Transurban Group (TCL), has joined its board as a non-executive director. RIO up 1.3% to 7349c.
  • The AIG/PwC Performance of Manufacturing Index fell by 0.1 points in August to 43.3. Australian manufacturing activity contracted further in the month as it continued to suffer from strong overseas competition and the high Australian dollar.
  • (WTF) up another 5% today to 443c after putting on another 5% yesterday on talk they might be bid for. One sticking point is their founder, Graeme Wood, still owns 30% of the company.
  • Dr. Gloom, Boom and Doom, Nouriel Roubini, said the odds of a US recession next year are 60% according to his calculations. He said, “We have reached stall speed in the economy, not just the U.S. but also in the euro zone, the U.K., the most advanced economies. We’re entering a recession based on my numbers.”
  • Notable stocks going ex-dividend include: Foster’s Group (FGL) – 13.25c, Insurance Australia Group (IAG) — 7c, Sonic Healthcare (SHL) — 35c, Tatts Group (TTS) — 11c, Challenger Ltd (CGF) — 9.5c, Treasury Wine Estate (TWE) — 6c and IOOF Holdings (IFL) — 22c. (WTF) — up another 4% today — after a 5% rise yesterday on talk they might be bid for. The fact that founder, Graeme Wood, owns 30% of the company is a double edged sword. If they are bid for, and if the offer is high enough, he might just call it a day and sell into it. On the other hand, he might decide it’s not a good enough price and block the takeover from going through. Broker recommendations are mixed on the stock:

  • CitiHold – 415c target price
  • Merrill Lynch – Underperform – 350c target price
  • JP Morgan – Overweight – 537c target price
  • UBS – Neutral – 440c target price
  • Credit Suisse – Outperform – 530c target price
  • Deutsche Bank – upped to Hold from Sell – $4 target price
  • RBS – Hold – 418c target price
  • Macquarie Equities – upped to Outperform from Neutral – 450c target price

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