The market is down 14. The SFE Futures were up 1 this morning.

The Dow closed down 11, while the S&P 500 was up 0.1%. Energy and Financial stocks the best, while Materials dragging despite the $80bn merger talks between Glencore and Xstrata which jumped 5% and 10% in the UK. The Nasdaq closed up 0.4% as tech stocks gained on strong results from chipmaker Qualcomm. The oil price fell to a six-week low as supply rose and demand dropped — it is now down $1.05 to $96.56. US bonds were down. Ben Bernanke told the House Budget Committee that the Fed’s decision to hold interest rates at record low levels for three years was appropriate in a time of high unemployment and stable inflation. The Australian dollar has fallen after hitting five-month highs yesterday when it rose to 107.58¢. It is now buying 107.13¢.

Main points

  • The week ahead will be a busy one. We are getting into the results season proper. BHP Billiton is expected to announce an interim net profit of between $US9.2bn and $US10.8bn. The final net profit figure out of Rio Tinto — results due Thursday — is expected to be $US15.16bn. Telstra which has been trading in an uptrend since November last year, has results on Thursday and will pay a FY 28c dividend for the next couple of years. NAB also has a trading update. See results diary below.
  • Austar United Communications (AUN) remains confident that a $2bn buyout by Foxtel will go through without any issues. AUN up 1.2% to 117.5c.
  • Qantas Airways (QAN) has raised fuel surcharges to offset the cost of carbon schemes. The airline said its fuel bill for the six months was $2.2bn.  QAN up 0.5c to 160.5c.
  • Panoramic Resources (PAN) announced they would acquire all the outstanding shares in Magma Metals (MMW) by way of an off-market takeover bid. PAN up 0.5c to 127.5c.
  • Extract Resources (EXT) is in a trading halt. They are waiting for a bid from China Guangdong Nuclear Power Corp that would value them at almost $2.2bn. EXT last traded at 857c.
  • Westpac Bank (WBC) is cutting jobs as part of efforts to reduce costs in response to slowing lending conditions. As many as 560 people in technology and administrative jobs are expected to be cut. WBC up 3c to 2095c. Westpac has a trading update on 16th Feb.
  • Lynas Corp (LYC) jumped 19% yesterday. This morning JB Were drop their rare earths price forecasts by 17%. They have a 190c target price on LYC. Patersons have a 290c target price and a BUY recommendation. LYC down 9c to 150c this morning.
  • Most brokers have a Neutral or Hold on Wesfarmers post their sales numbers yesterday. Valuation seems to be the issue, with many saying the stock is trading on a high PE ratio. WES up 1c to 2991c. They are on a PE of 14.7x and a yield of 5.89%. Return on equity is 8%.

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