The local share market looks likely to open stronger this morning after US and European markets gained overnight and commodity prices also rose.
Returning from the Martin Luther King Holiday, stocks rallied on Wall St Tuesday with investors betting that a potential Republican victory in Massachusetts’ Senate could potentially delay or end President Obama’s health care reform sending health care stocks up.
Gains in tech giant IBM ahead of its earnings results also helped add to the rally.
After the closing bell IBM reported higher quarterly sales and earnings that beat expectations.
In takeover news US food maker Kraft Foods has agreed to buy UK confectionary company Cadbury in a deal worth US$19.5 billion.
The Dow Jones Industrial Average is up 116 points to 10,725. The S&P500 Index is up 14 to 1,150 and the NASDAQ is 32 points higher at 2,320.
European markets were also higher. London’s FTSE is up 19 points and Paris gained 32, and Frankfurt is up 58 points.
Asian markets were mixed: Hong Kong’s Hang Seng rose 218 points, Tokyo’s Nikkei fell 90 points and China’s Shanghai Composite advanced 10 points.
Back to the local share market now, and the Australian share market ended lower on Tuesday. The S&P/ASX 200 Index finished 50 points lower at 4,861 and on the futures market the SPI200’s up 36.
Looking at currencies; the Aussie Dollar at 8:45AM is buying 92.38 US cents, 84.2 Yen, 64.65 Euro cents and 56.45 Pence Sterling.
In economic news: CBA’s business sales indicator for December is to be released, as well as the Westpac/Melbourne Institute survey of consumer unemployment expectations for January and ABS new motor vehicle sales for December.
In company news about this morning: Shares in Australian Pharmaceutical Industries Ltd (ASX:API) dropped 2.06 per cent to $0.71 yesterday. The company says it remains cautious on the outlook for the remainder of 2010 after its performance in December was below management expectations. Total retail sales for the four months to December 31 came in 5.6% higher than the same period last year, with comparable store sales, stores open more than a year, up 2.2% and just o.3% in December as interest rate increases and the end of the government stimulus package affected consumer confidence. CEO Stephen Roche says sales over Christmas were disappointing, although the company managed to maintain its margins through the period. Chairman Peter Robinson says the company is watching economic trends carefully, particularly in the retail sector as further interest rate increases may continue to affect consumer confidence in 2010. Australian Pharmaceutical Industries reported a profit for the year to August 2009.
Shares in software company Powerlan Ltd (ASX:PWR) closed steady at just over 7 cents yesterday. The company has been told to delay its recently announced rights issue after takeover suitor Alpha Growth International claimed it was designed to frustrate its takeover bid. Last Friday Powerlan announced that Alpha intended to make a takeover offer for the company. Powerlan says its rights issue will now be delayed pending a decision by the Takeovers Panel. However the company has defended its rights issue saying it was not designed to frustrate Alpha’s takeover but to raise capital to repay a loan. Powerlan recorded a loss for the 2009 financial year.
Taking a look at ex-dividends, and while there are no companies going ex-dividend today, coming up tomorrow we have Mirrabooka Investments and Contango Microcap on Friday.
To metals: Gold added $9.50 to US$1,140 an ounce for the February contract on Comex. For the March contract Silver gained 37 cents to US$18.80 and copper is up 8 cents at US$3.45.
And the price of oil is up $0.95 at US$78.95 a barrel for February light crude in New York.
