The Australian share market looks set to open weaker after a late sell off on Wall Street saw the market there close lower overnight. Also commodities generally finished down.
The fall in the US was triggered as earnings guidance and results from retailers Kohl's and Urban Outfitters disappointed.
On top of that a forecast from Cisco Systems failed to improve investor sentiment toward technology. And European debt worries also lingered.
In economic news, around 444,000 Americans filed new claims for unemployment benefits last week, compared to 448,000 the week before. According to the Labor Department that’s the lowest weekly result since late March. But the improvement hasn't been enough to drive real job growth. Continuing claims, rose to 4,627,000 from 4,615,000 the week before.
The Dow Jones Industrial Average finished 114 points lower at 10,783. The S&P500 Index fell 14 points to 1,157 and the NASDAQ is down 31 at 2,394.
European stock markets finished mixed. London’s FTSE gained 50, Paris slipped 2 points and Frankfurt added 68 points.
To our local region and Asian markets were higher. Hong Kong’s Hang Seng gained 210 points, Tokyo’s Nikkei rose 227 and China’s Shanghai Composite is up 55.
The Australian share market closed in the black yesterday on positive offshore leads, stronger commodity prices and improvements in our employment figures. The S&P/ASX 200 Index closed 80 points higher at 4,653 and on the futures market the SPI200 is down 51 points. On to currencies: the Aussie Dollar at 8:40AM was buying 89.56 US cents, 61.36 Pence Sterling, 83.05 Yen and 71.47 Euro cents.
To company news around this morning: Shares in Seven Group Holdings (ASX:SVW) edged up 1.3% to $6.99 yesterday. It seems that many investors are less than excited about the merger of Kerry Stokes’ Seven Network and WesTrac. The union of the media investment business and the industrial equipment distributor was officially completed yesterday. However it’s estimated that Mr Stokes is down $200 million on his investment. Shares in the merged Seven Group Holdings started trading on April 30 and ended their first day at $7.45 - since then the Group’s shares have fallen by more than the benchmark S&PASX200. The new shares have been valued at $1 billion and yesterday they were worth $804 million. The Australian Financial Review is reporting that some fund managers see potential for upside at some stage in the future based on the view that many analysts and investors have previously applied a discount to Seven shares because of concerns about how the company would spend its cash. Taking a look at the company’s results last year, Seven Group Holdings earned a $12 million for the year to June 30, 2009.
Shares in Singapore Telecommunications (ASX:SGT) fell 1.25% yesterday to close at $2.37. The SingTel owned, Optus has thrown its support behind measures to stop infrastructure builders from competing with the National Broadband Network (NBN). Speaking at yesterday’s release of the company's results chief executive Paul O'Sullivan said Optus would fully support and endorse protections to ensure the government's $43 billion NBN was successful. Some of those protections have been outlined in the $25 million study into the viability of the NBN, including the introduction of a controversial levy to crimp the ability of Telstra and others to build high-speed networks in high-value, low-cost areas in competition with the NBN. The study has attracted criticism for suggesting that such a levy be imposed, but Mr O'Sullivan said overbuild protections were necessary to avoid a repeat of the cable wars Optus waged with Telstra in the 1990s. Looking at Singapore Telecommunications 2009 results, the Telco posted a $3.4 billion net profit for the year to March 30, 2009.
Two companies going ex-dividend today include Incitec Pivot with a 1.8 cent unfranked dividend and Global Resource Masters Fund with a 0.5 cent fully franked dividend. On Monday BT Investment Management, Telcom New Zealand and Westpac Banking Group are all going ex-dividend. To commodities: the price of gold is down $13.90 to US$1,228.80 an ounce for the May contract on Comex. Silver is 16 cents lower at US$19.48 and copper is up 4 cents at US$3.22.
And finally oil is down $1.25 to US$74.40 a barrel for June light crude in New York.
