The market is up 18. The SFE Futures were up 19 this morning.

The Dow Jones closed up 45 overnight. Dow up 143 at best. After three days of losses the Dow closed up 45 points on a number of positive US economic reports.  Initial jobless claims fell to the lowest level since May 2008. But perhaps the biggest overnight driver was the pressure coming off in Europe for a night after a Spanish bond auction raised twice as much as its target. They were looking for 3.5bn euros and raised 6 billion. On the back of that Spanish and Italian and French 10 year bond yields fell relieving the pressure on bond markets. Metals were mixed on the LME, the oil price fell $1.59 to $93.26 and Gold fell another $14.90 to $1572. The Aussie dollar is now below parity at 99.10c.

Main points:

  • JB Hi-Fi (JBH) — Profit Downgrade — After the close of market yesterday, JBH announced earnings for FY12 would be 5% below last years result. The downgrade comes after price discounting at JBH in response to competition. The forecast assumes Christmas trading conditions would be in line with the trend of recent months. Comparative sales fell 1.8% for JB Hi-Fi branded stores. JBH down 14.7% to 1280c. The rest of the retail sector is now seen as ‘cum downgrade’ as well.
  • Insurance Australia (IAG) has agreed to acquire AMI Insurance for NZ$380m. They expect AMI to generate at least NZ$30m synergies in 2 years. Integration costs are expected to reach NZ$40m. IAG up 2.5c TO 312.5c.
  • Bendigo and Adelaide Bank (BEN) said they will pay $130m for the Australian unit of Bank of Cyprus Group and will raise $120m from a share issue to pay for the deal. BEN will issue new shares to institutional investors at 845c a share, 6.1% discount to their last traded price $9. BEN last traded at 900c.
  • Forge Resources (FRG) has signed a binding documentation with Atlas Iron (AGO) for the acquisition of the Balla Balla Magnetite, Vanadium and Titanium project for $40m plus a capped royalty payment structure based on tonnage sold. FRG last traded at 33c.
  • Coca-Cola Amatil (CCL) released their trading update today and announced the sale of shares in Pacific Beverages. CCL sold their 50% interest in Pacific Beverages to SABMiller for $305m and expects to record a profit after tax in the second half of 2011 from the sale of approximately $165m after taking into account transaction costs. MD Terry Davis says he is pleased with the outcome. CCL up 2% to 1203c.
  • Tox Free (TOX) have successfully completed their $27m equity raising. TOX up 2c to 210c.
  • Caltex (CTX) says they expect to post a full-year replacement cost of capital of $245m to $265m before significant items. The company said it also forecasts historic cost profit for 2011 of $330m, slightly higher that $317m last year. CTX down 22c to 1256c

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