The market is down 2. The SFE Futures were up 17 this morning.

The Dow Jones closed up 42 overnight. It was up 68 points at best and down 31 at worst. Energy stocks were up 2.6% on BHP’s $12bn takeover bid for Petrohawk. Google’s quarterly results beat expectations (stock up 13%) which lifted the Nasdaq 1%. Eight of 90 banks tested failed the second round of European “stress tests” … better than the 12-15 the market expected. The gold price was up 80c to $1590.10, while the oil price fell $1.55 to $97.24. The Australian dollar is buying 106.42 US cents, down from 107.27c.

In the news today…

  • Santos (STO) has agreed to acquire all shares of Eastern Star Gas (ESG) that it doesn’t already own. The ESG Board recommends the proposal saying it reflects the strategic value implicit in Eastern Star Gas’ resource position. The implied offer price of $0.90 per share represents a 51% premium to ESG’s closing share price of $0.595 on Friday and values the company at approximately $924m. ESG up 42.4% to 85c, STO down 3.3% to 1280c.
  • NRW Holdings (NWH) has won a further $112m contract with Fortescue Metals Group (FMG) to provide earthworks, concrete works, piling and track works at FMG’s Herb Elliott Port facility expansion. NWH down 2c to 276c, FMG unchanged at 641c.
  • Sundance Resources (SDL) has received a takeover offer from Hanlong Mining Investment who already have an 18.6% stake. They have offered 50c per share, a 25% premium, valuing SDL at $1.44bn. SDL’s board advises shareholder to take no action. SDL up 20% to 48c.
  • A confidential Westpac (WBC) briefing document obtained by Fairfax’s BusinessDay, says WBC expects its new franchise, Bank of Melbourne, to secure 300,000 new customers from the other major banks. They say their competitors stand to lose as much as $100m. Half of the 300,000 customers it will poach are expected to come from the Commonwealth Bank of Australia (CBA).  WBC up 6c to 2064c, CBA down 13c to 4889c.
  • News Corp (NWS) The U.K. phone hacking scandal is spreading to the US and in the UK as the Metropolitan police chief resigns and the CEO Rebekah Brooks is arrested. As one media outlet describes it, all the firewalls put in place by Murdoch to protect him from responsibility have burnt down. NWS down 7% to 1374c. The stocks is now down 20.7% from the recent high.
  • Djerriwarrh Investments (DJW) up 1.6% after reporting a 127% rise in full year net profit and a 16c final dividend.
  • New Zealand’s CPI rose by a higher than expected 1% in the June quarter. It is up 5.3% for the year to June 30. Economists expected 0.8% rise in the quarter and a 5.1% rise for the year.

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