Morning Market Report

The market is up 31 points. The Dow Jones was up 65 points to 16,514 — The market strengthened throughout much of the day but lost some ground in the afternoon. Biotechnology stocks were relatively strong and the leaders were in the healthcare, transport and financial sectors. Trading volume was below average in a 116 point range.

The healthcare sector benefited from news that UK GlaxoSmithKline and Swiss giant Novartis would create a new consumer healthcare business. There were also reports that US Pfizer could launch another bid for the UK’s AstraZeneca after a takeover approach was rejected — this deal would create the world’s largest medical company. And Valeant Pharmaceuticals International proposed a merger with Allergan, the maker of Botox.

US earnings were positive — Travelers, United Technologies and Netflix beat earnings expectations earlier in the session with many reports due after the market closes.

US economic data was generally positive — home sales fell 0.2% to 4.59 million in March but were in line with estimates. House prices were higher and the Richmond Federal Reserve index rose from -7 to +7 in April.

European markets were stronger — The UK FTSE was up 0.85%, the French CAC was up 1.18% and the German DAX was 2.02% higher.

The Aussie dollar was stronger — and is currently trading at US93.65c ahead of CPI data today.

Oil fell US$2.24 or 2.15% to US$102.13 a barrel.

Gold fell US$7.40 or 0.57% to US$1280.60 an ounce. 

Iron ore fell US$0.80 to US$112.50 a tonne.

Base metals were stronger — led by nickel up 2.28%, aluminium up 1.38% and zinc up 1.02%.

Carlisle — up 4.59%

STORIES 

• Qrxpharma (QRX) — Down 80% after their painkiller failed to receive approval from the US regulator.
• MaxiTRANS Industries (MXI) — Down 15% after releasing a trading update and a profit downgrade.
• Newcrest Mining (NCM) — March Quarterly Report — Third quarter gold output down after maintenance work. Output came in at 551,590Oz down 11%. Third quarter copper output came in at 21,012 tonnes down 7%. Despite this they have maintained financial year 2014 gold and copper output guidance. NCM sees financial year 2015 output at Cadia Valley below 2014 production and financial year 2014 all-in sustaining costs at low end of prior guidance.
• Resolute Mining (RSG) — Up 6% on their Quarterly Activities Report.
• iiNet (IIN) — Chairman Michael Smith says the company has a warchest of more than $350 million to buy its rivals as part of an “aggressive” campaign. A report in the AFR says the company is looking to lock in its new three year strategy by June 30. It says IIN fears becoming a company who just maintains the internet pipes, whilst companies like Google and Facebook reap big profits. Yesterday they hired two new experienced directors.
• Oil Search (OSH 866c) — Shares closed up 0.2% yesterday after releasing its production report. Production of oil and gas was 1.68 mmboe, down 5% from the final quarter of 2013 due to planned shutdowns of some of its facilities during the period. 1Q revenue was down 19% to $US170.2 million due to weaker sales. The PNG LNG project will deliver its first cargo a few months ahead of schedule, starting mid-2014, rather than the third quarter as previously forecast. The expected cost is unchanged at $US19 billion. 2014 production is forecast to be at the top end of their previous forecast range of between 13-16m boe. CEO Peter Botten outlined an aggressive LNG expansion plan and said it is “likely to be involved in two, if not three, additional LNG trains in PNG over the next five years.”
• Paladin Energy (PDN 45.5c) — Closed up 1.1% yesterday after releasing production numbers. Revenue has fallen as uranium prices continued to decline.