The market is down 33. SFE Futures were down 40 this morning.

The Dow Jones closed down 243 — the Dow was down 263 at worst. US markets began the session with an opening sell-off after more disappointing local third quarter earnings numbers, doubts over the future of the EU bond bailout program and Moody’s downgrading five Spanish regions. Oil, metals and gold down substantially with US bonds up and bond yields down. Apple fell on the launch of its iPad Mini — the market didn’t think the high entry price cost would sell and if it did it would bastardise iPad sales. Others thought it would send Apple to $1000.

Moody’s has downgraded five Spanish regions by one or two notches due to limited cash reserves and forthcoming bond payments. Moody’s said the overall cost of recapitalising struggling banks was likely to be nearer to £34 billion, double the government’s estimate.

The Bank of Spain estimates that Spain’s GDP contracted by 0.4% for the September quarter, the fifth consecutive quarterly contraction. Official estimates will be published next week. The Spanish 10 year bond yield was up 12.9bpts to 5.62% and the Italian 10 year bond yield up 10.2bpts to 4.86%. Oil down $6.10 to $86.43. Gold down $37.30 to $1707.40. Silver down $1.20 to $31.70.

Worst sectors — Basic materials (-3.3%), energy (-2.4%), financials (-1.6%) and health care (-1.4%).

  • Chinese HSBC Flash PMI figures out 12.45pm.
  • Inflation numbers higher than expected — CPI rose 1.4% in the September quarter up from a rise of 0.5% in the June quarter. CPI was expected to rise by 1.1%. Annual CPI rose 2.0% above an expected 1.7%. No doubt the Opposition will beat this up as the carbon tax effect.
  • WorleyParsons (WOR) — Has agreed to purchase a South African company for $100 million. The stock fell 6.2% yesterday on the back of a profit warning with their AGM yesterday. There are plenty of downgrades in the research this morning. WOR is down another 5.37% to 2397c. Combined with a gloomy Bradken statement at their AGM the mining sector is struggling this morning.
  • APA Group (APA) — Guidance increased — Has revised their immediate guidance and now expects EBITDA to be in the range of $660-670 million up from a previous guidance of $540-550 million. APA is flat at 498c.
  • Billabong International (BBG) — AGM — No real surprises here. The company expects to deliver EBITDA in the range of $100-110 million which is reaffirming previous guidance. Debt is lower and balance sheet stronger. Trading conditions remain challenging. AGM was dominated by the chairman addressing the recent takeover bids. BBG is down 1.46% to 84c.
  • Fairfax (FXJ) — AGM — Encouraging comments from the chairman who said FXJ now has a clear strategy to negotiate their way through a “perfect storm of cyclical weakness and structural change”. The company said $235 million in costs were being stripped. FXJ received 81% shareholder support for the pay report. Fairfax is on track to achieving $135 million of cost savings by June 2013. FXJ is up 5.26% to 40c.

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