The market is down 35. The SFE Futures were up 4 this morning.

The Dow Jones closed up 4 overnight after being down as much as 106. The NASDAQ closed down 1%. Economic data impressed with existing home sales rose 4% in November to 4.42m, the highest level in ten months. The consensus expected sales to increase by 1.2%. Sales are now up 34% from mid-2010. The MBA Mortgage Index dropped 2.6% after rising 4.1% the prior week. The big news overnight was that the ECB has provided eurozone banks with a record €489.19 billion via its 3-year refinancing operation — the demand was much higher than expected and was met with caution rather than relief as it becomes clear that credit conditions have been tighter than thought and on the realisation that the bank sector is now ECB dependent. Metals were mixed on the LME, the oil price put on $1.78 to $99.02 and gold fell $1 to $1616.60. The Aussie dollar increased to 101.03c from 100.81c.

Tomorrow is Christmas Eve. Financial Markets will close at 2.30pm and re-open again on Wednesday, December 28.

Main points

  • Kathmandu (KMD) — Another retail sector profit warning — KMD has forecast a drop in earnings in the six months to January 31 because of weaker than expected Christmas trading. They said that sales in the 5 weeks since mid-November have been less than last year. KMD down 20% to 132c. Other retailers down as well.
  • Gloucester Coal (GCL) remains in a trading halt but is today expected to make an announcement about a potential takeover. There has been speculation of an $8 billion merger with Yancoal Australia, owned by China’s Yanzhou Coal Mining, to create Australia’s largest independent coal producer.  GCL unchanged at 703c.
  • OneSteel (OST) will writedown $150m in the value of its LiteSteel Technologies business after continued weak residential construction activity and uncertainty over the timing of recovery, particularly in the US market. OST up 3c to 71c.
  • Asciano (AIO) have entered into a new 10-year performance based contract with Rio Tinto Coal Australia for movement from their Hail Creek mine and Kestral coal mine in Queensland. AIO down 8c to 456c.
  • Silex System (SLX) said they will start the construction of stage one of what it hopes will become Australia’s largest solar power stations at Mildura. SLX up 10% to 252c.
  • Woodside Petroleum (WPL) has been upgraded by UBS to Buy from Neutral with a 3835c target price. They say, “Looks cheap, mainly because we think it is currently valued for its operating assets and Pluto LNG T-1 only.” WPL up 23c to 3093c.
  • Almost the whole property trust sector has gone ex-dividend today

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