The market is down 68 points.

The Dow Jones was down 326 at 15,373 — the market fell throughout the day and traded in a 330 point range in high volume.

The market fell after weaker than expected ISM manufacturing data which fell to an eight-month low of 51.3 in January from 56.5 and much lower than forecasts of 56.0. The new orders component was particularly weak, falling to the lowest levels in 33 years and raising concerns about the strength of the US economy in the lead up to Friday’s employment data. The weakness accelerated once key technical support levels were breached with the S&P 500 breaching 100 moving day average and the Dow breaching its 200-day moving average.

The S&P fell 41 points to 1742.

Oil was down 0.86% at US$96.65.

Gold rose $16.80 to US$1256.60 per ounce.

The US$ was weaker against most major currencies and the Australian dollar rose to a high of US88.25 cents but is now lower, currently trading at US87.53.

VIX Volatility index rose 15.43% to 21.25.

US treasury markets were stronger — the yield on the 10 year bond fell six basis points to 2.577%, breaking below the 2.60% level, as investors flew to the safety of treasuries.

European shares were weaker — the FTSE fell 0.69%, the German DAX was down 1.29% and the French CAC fell 1.39%.

European bonds were generally stronger — the yield on the Euro 10 year bond fell one basis point to 1.643%, the UK 10 year bond yield was 2 basis points lower at 2.688%.

Base metal prices were generally weaker — aluminium was down 1.79%, nickel fell 0.73% and copper was down 0.30%.

Iron ore was unchanged at US$122.60 a tonne.

STORIES

  • The debt ceiling is back in focus as FOMC Secretary Lew warned that the Government’s extraordinary measures that have funded them will be exhausted by the end of the month if the debt ceiling is not raised.
  • Janet Yellen took over as Fed Chair. The market fall is hardly the backdrop she would have wanted. She appears before Congress on January 11.
  • RBA MEETING TODAY — 20 out of 20 economists expect no change to the official cash rate today (2.5%).
  • Downer EDI (DOW) — First half profit of $99.1 million up 5.4% which was in line with one broker forecast of  $99.6 million and ahead of a consensus forecast of $95 million. The company says it is on track to meet its full year forecast for a profit of $215 million. Revenue was $3.76 billion down 17% on the $4.53 billion in the pcp. EBIT down 5.4% to $160.1 million from $169.3 million. Interim dividend of 11c (7.7c franked).
  • REA Group (REA) — half yearly profit —  Revenue came in at $209.4 million up 30% which was also above an expected $198.4 million. Interim dividend of 22c. The company said that its strong profit result was due to the long term vision it took on its business. It saw where the property advertising market was headed and made a decision to shift its focus from subscriptions to depth products which met specific market needs. This change in strategy, it says, is delivering excellent growth and returns. Revenue in Australia from depth products was up 67%.
  • Challenger Diversified Property Group (CDI) — Has reaffirmed its full year earnings and distribution guidance. It posted a profit of $15.17 million down 27% impacted by an investment property fair value adjustments of $9 million. Interim dividend of 9.2c.