The market is down 27. ASX 200 Futures were down 81 this morning and we have been down 75 at worst. The Dow Jones finished down 354. The Dow was down 380 at worst and finished the session on above average volumes. It is down 560 in two days.

European shares posted their biggest intraday fall in 19 months on the back of the prospect of reduced US stimulus and the sluggish PMI numbers out of China yesterday. UK FTSE down 2.98%, Germany down 3.28%, France down 3.66%, Spain down 3.41%, Italy down 3.09%.Since the Fed spoke the 10 -year bond yield is up 25bpts to 2.41%. 

The Philadelphia Fed manufacturing survey was up from -5.2 to +12.5 in June a two-year high beating the forecast of -2. US existing home sales were up 4.2% in May to an annual rate of 5.18 million, beating the forecast of 5.01 million — the highest level since November 2009. The median home sales price increased by 15.4pct compared with a year ago.

Metals down — Copper down 2.70%, Nickel down 3.53%, Zinc down 1.67%, Aluminium down 1.78%. Spot iron ore up 60c to $120.60. Gold was down $80 to $12874.70. The A$ is at 92.05c. 

ANNOUNCEMENTS & STORIES … not a lot of news today

  • Rio Tinto (RIO) —  The Mongolian government has asked to delay the first copper concentrate shipment from the massive Oyu Tolgoi gold and copper project which was due to start shipping on Friday. Rio says shipping will commence as soon as the Government gives the green light. The Mongolian government is currently getting ready for a presidential election on Wednesday. The copper project is an integral part of Rio’s plan to reduce iron ore dependence which accounts for about 80% of earnings. RIO is down 0.3% to 5247c.
  • BHP — Has sold a 15% stake in a WA iron ore mine to two Japanese companies for $US1.5 billion. ITOCHU Corporation is investing $US800 million and Mitsui Corp is investing $US700 million in shares and loans in BHP’s Jimblebar mine in the Pilbara region. BHP is down 0.7% to 3192c.
  • Fortescue Metals Group (FMG 305c) — Yesterday trimmed guidance and said they will miss their iron ore production target for the 2013 financial year. Rather than producing between 82 million to 84 million tonnes, the company now expects to produce between 80 million to 82 million tonnes. The company has blamed wet weather for disrupting exports. Patersons put a hold recommendation on the stock yesterday with a 356c target price. Citi has a high-risk buy recommendation with a target price of 510c. FMG is down 1.27% to 310c.
  • Telstra (TLS 458c) — Boss David Thodey says the company’s copper wire network is capable of functioning for another 100 years in what seems to be a political endorsement of the Coalition’s broadband policy. Merrill Lynch isn’t so positive on the stock. It has an underperform recommendation with a target price of 395c. TLS down 1c at 457c.