The market is up 12. The SFE Futures were down 7 this morning.

The Dow recovered a 131 point fall to close down 6. The EU Summit has delivered nothing much (a new fiscal treaty on budget deficit and debt rules in the EU excluding Britain) and there is no deal with Greek bond holders yet — the deal is dragging on and depressing markets. Meanwhile there has been a 217bp jump in Portuguese 10 year bond yields overnight as the default focus moves towards Portugal from Greece. The Chinese market fell 1.4% yesterday. Chinese PMI numbers are due out tomorrow. Metals down on the LME. The gold price dropped $3.40 from a seven-week high to $1732, while the oil price was down 0.7% at $98.90 a barrel. The Aussie dollar fell slightly to 105.94c.

Main points

  • Woolworths (WOW) First half sales were up 5% on year to $29.7bn. Brokers on average where expecting 4.5% to 5.3%. Supermarket sales were up 5.6%, while sales in the new Home Improvement Division were up 16.4%. They also announced a divestment of their Dick Smith consumer electronics business after a strategic review which involves closing 200 stores and putting $3-400m worth of sales back to their competitors.  WOW up 2% to 2495c. JB Hi-Fi and Harvey Norman up 3.9% and 5.3%.
  • Fitch has placed the AA credit ratings of Australia’s big four banks, ANZ, CBA, WBC, and NAB on ratings watch negative. The ratings agency said that Australian banks’ persistent dependence on offshore wholesale credit markets for funding makes them riskier.  ANZ up 3c to 2150c, CBA up 1c to 5105c, WBC up 7c to 2117c and NAB up 2c to 2393c.
  • Lynas Corp (LYC) has announced its main rare earths project has been delayed by political and monsoon issues. They also await regulatory approval from the Malaysian government to operate in Malaysia. LYC up 1.5c to 132.5c.
  • There is some talk that Rio Tinto (RIO) will take impairment charges against their aluminium and diamond assets when they release their results next week. Analysts on average expect RIO’s FY underlying earnings to come in at $US15.6bn. RIO has been a strong performer in the past 30 days having risen 14.4%. RIO up 64c to 6964c.
  • Ivanhoe Australia (IVA) – RIO has now taken control of the Canadian listed Ivanhoe Mines by upping their stake from 49% to 51% paying a 20% premium to market. The talk is that they are only interested in a Mongolian gold and copper deposit in which case their 59% IVA holding could be up for sale. IVA up 2.3% to 197c.
  • Gunns (GNS) up 33% after they confirmed yesterday the terms for an extension to Dec 31, 2012 of their $340m syndicated debt facility and primary working capital facilities.
  • NAB business survey shows confidence picked up in December but the overall mood of executives remains subdued

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