The Market is down 71 — banks down again as the safe income theme continues. Our futures were up 16 this morning. The Dow Jones finished down 13.
The Dow was down 127 at worst and up 41 at best. US new home sales were up 2.3% in April to 454,000 beating a forecast of 425,000 and the previous reading of 444,000. The median sales price of a new home jumped 14.9% from a year ago.
US weekly jobless claims were down 23,000 to 340,000 last week, beating the forecast of 345,000 and the previous reading of 363,000.
A report by New York Federal Reserve staff economists said that they expect US economic growth to be at 3.25% next year. They see the labour market as likely to take a long time to recover, with unemployment averaging 7.35%. Inflation is expected to move towards the Fed’s 2.0% target.
European shares are down after they got their first opportunity to react to Ben Bernanke’s comments and the contraction in Chinese manufacturing hit.
Japan’s Nikkei was down 7.3% on the back of volatile bond yields.
Hewlett-Packard jumped more than 17% after raising its 2013 outlook and increasing its dividend 10%.
- Newcrest Mining (NCM) — An exploration licence near one of its biggest mines is being reviewed by the state government after a court upheld objections by a junior explorer. NCM is up 3.44% to 1505c.
- Crown (CWN) — James Packer has moved to sell his $264 million stake in Echo Entertainment Group (EGP) despite gaining final approval to increase his stake past 10%. He sold 82.6 million shares at 320c, a 7% discount to Thursday’s closing price. Both companies are fighting to develop a new Sydney casino. Only one of the proposals will be approved. The share sale can only mean that Packer is confident of winning the Sydney proposal. Brokers are also positive on the stock — there are three buys and one overweight. It will be interesting to see how Echo Entertainment trades — now that the takeover premium has been removed. CWN is expensive trading on a PE of 21x and has a low gross yield 3.4%. CWN is down 1.03% to 1292 & EGP is down 10.17% to 309c.
- Woolworths (WOW) — DuluxGroup have said that they will withdraw all their paint products from Masters stores freeing up the paint category for Wattyl. Dulux is the third major label to withdraw from Masters. Analysts say losses from Lowe’s home improvement JV are likely to be higher this year, hitting the bottom line weaker than Woolworths’ guidance. Credit Suisse says the losses this year could be 40%-100% higher than the $97 million loss in 2012. UBS have a neutral rating with a 3060c target price. They are concerned that the loss of DuluxGroup will damage their brand and reduce traffic, reflecting weaker overall sales. But it’s still early days, so they have kept their recommendation. WOW is down 1.38% to 3350c and DLX is down 2.6% to 449c.