The market has been thumped on the open – down 117 and is 28 points off its lows. The SFE Futures suggested a 126 point fall in the market this morning.

WALL ST DOWN 280 – Wall St. moved in a big 280 point range and suffered its biggest fall in three weeks on a few factors:

  • Disappointment with the FOMC minutes – no real indication that a rate cut is likely
  • State Street tell us they have a $22bn exposure to commercial paper conduits
  • A big fall in consumer confidence numbers
  • A record fall in home prices
  • A fall in housebuilders on a housing report
  • Merrill Lynch downgraded banks and the financial sector was the worst sector out of 147

The materials sector (resources) was the 2nd worst performing sector in the US overnight. BHP down 88c to 3663c this morning and RIO down 220c to 9000c. Metal prices down overnight with Copper down after a rise in LME inventories to the highest since May. Zinc was down 1.8% and Aluminium down 1.7%. Nickel was unchanged. Zinifex down 66c to 1673c. Oil price down 19c to $71.79 on the back of credit worries and Hurricane Dean missing oil facilities in the Gulf of Mexico. Woodside down 76c to 4294c. Gold down $2.70. Newcrest down 15c to 2446c. There is some talk in the US that Barrick might bid for Newmont. The gold sector was the only sector out of 147 that closed up in the US. Sector consolidation would be good for Newcrest which is a perennial bid target.

A lot of results today…

  • Westfield Group (WDC) announced 1H07 net profit fell 42% to $1.97bn from $3.38bn last year, but excluding property revaluations and other non-cash items, operations earnings increased 7.4% to $844m. They declared an interim dividend of 53.25c and confirmed their FY07 distribution guidance of 106.5c a share. The Lowy family said the company was well positioned for future growth and expected to complete redevelopments worth close to $2bn by the end of this year. WDC up 6% in the last week but doing it tough today, down 51c to 2048c.
  • Coates Hire (COA) down a big 36c or 6.5% to 517c after announcing a 8% drop in FY07 NPAT to $92.4m, down from $100m last year. The poor result is only the half of it, management they say the company is still up for sale but none of the offers on the table offer “sufficient value” so are not recommending any bids and will look at any new offers. “The bids received do not reflect any appropriate synergy benefits that would be available, particularly considering Coates’ leading market position and strong geographical footprint”. They put themselves up for sale in June.
  • Another sluggish result from Amcor (AMC) – they announced net profit before significant items came in at $397m, down 2.2% from last year’s result of $405.9m. (Analysts were expecting $387.9m)They also declared an unchanged 17c final dividend. AMC has been disappointing in the past year; their shares are only up 5% compared to a 20% gain from ASX200 index.

In other news…

  • You have until tomorrow close of business to buy Fosters for its off-market share buyback and still be eligible for the franking credits under the 45 day rule. FGL receiving positive broker feedback this morning after their results yesterday and is only down 4c today to 628c.
  • Ten Network Holdings (TEN) announced they have issued 523m new shares to majority shareholder CanWest Global Communications. CanWest received approval from regulators last week and turn their 56% economic interest into shares. Not a big deal really, just makes work for analysts a little easier when working out what the company is worth. TEN now has 922m shares on issue.

In the Marcus Today newsletter today is an article about Australian Monopoly stocks. An oldie but a goodie. You just don’t know how lucky you are in Australia.

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