The market is up 36 points. The Dow Jones finished down 21 —  it was up 114 at best and down 28 at worst. Now 15500. The S&P 500 closed down 0.23 points.

A late sell off on Wall St came after Bernanke downgraded the outlook for the economic recovery. The US$ fell … despite that the A$ fell further. It hit a low of 89.26 and is now 89.34.

Otherwise the FOMC didn’t change policy rhetoric. See market call … if anything the tapering of quantitative easing has been pushed out a bit further (depending on data releases), which is essentially positive for equities. The end of the financial half year in the US also a possible excuse for the late sell-off. The end of our financial year also being blamed for the sell-off here yesterday.  The second-quarter GDP advance estimate came in higher than expected at +1.7% against forecasts of +0.9% but the last quarter was revised down from +1.8% to +1.1%.

The ADP jobs number, a private sector employment measure and a pre-cursor to the official US jobs numbers on Friday, came in better than expected with 200,000 new private sector jobs added in July ahead of the 188,000 expected. It bodes well for the official jobs number.

Resources down with BHP down 0.41% and RIO down 0.04% in the US with BHP closing at the equivalent of 41c up on its close in Australia yesterday thanks to the fall in the A$ more than the price of BHP in the US.

European markets mostly up — the UK FTSE up 0.76%, the German Dax up 0.06%, the French CAC up 0.15% with Spain down 0.27%, Italy down 0.37%, Greece up 2.05%. German retail sales fell 1.5% in June, the biggest drop since December. The eurozone unemployment rate fell for the first time in two years to 10.9% from 11.0%.

 Oil price up $1.95 to $105.03. Gold price down $11.60 to $1312. Spot iron ore was down for the third day on the trot — down $1 $129.90.

ANNOUNCEMENTS & STORIES

  • The official China manufacturing PMI has coming in better than expected at 50.3. Economists were expecting a reading of 49.8.
  • The AIG Performance of Manufacturing Index (PMI) was 42.0 in July, down 7.6 points from June.
    The below 50 reading shows activity in the sector is falling.
  • Amcor (AMC) — Has said that it will spin off its Australia and New Zealand packaging operations and its global distribution business into a separately listed company. This will allow the company to focus on hard plastics or flexible materials used to package goods. It didn’t specify what the new company would be worth. But the unit had sales of $2.8 billion in the fiscal year through June.
  • Transurban Group (TCL) — Says its annual profit more than tripled due to an increase in traffic volumes on their Australian toll roads. This is an improvement from last year’s result where it had to write down its US asset. Net profit grew to $171.7 million up from $54.9 million which included the write-down. Proportional operating earnings were up 5.6% to $828 million compared to a JP Morgan forecast of $821 million but fell just short of a Goldman Sachs forecast of $831 million. Distribution to be 34c up from 31c.
  • Leighton Holdings’ (LEI) — Theiss unit to build $650 million Moreton Bay rail link.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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