The Australian share market looks like it may be in for a weaker start this morning after Wall St closed marginally lower overnight and commodity prices retreated.
US stocks closed basically flat on Monday with losses in the energy sector outweighing gains.
Investors cheered a report showing a rise in personal spending but remained cautious ahead of key economic reports due out later in the week.
In economic news, the Commerce Department reported that personal income increased 0.4% in May, while personal spending rose 0.2% for the month. Expectations were for a 0.1% rise in personal spending.
The Dow Jones Industrial Average dropped 5 points to close at 10,139. The S&P 500 Index fell 2 points to 1,075 and the NASDAQ lost 3 points to close at 2,221.
European stocks closed higher; London’s FTSE added 25 points, Paris is up 57 and Frankfurt gained 87.
Asian markets were mixed on Monday: Hong Kong’s Hang Seng is up 36, Tokyo’s Nikkei fell 44 and China’s Shanghai Composite lost 18 points.
The Australian share market closed lower yesterday. The S&P/ASX 200 Index declined 29 points to close at 4,385 and on the futures market the SPI200’s down 15 points. Turning to currencies and the Aussie Dollar at 7:50AM was buying 87.34 US cents, 57.74 Pence Sterling, 77.94 Yen and 71.03 Euro cents.
In business news: Shares in engineering and infrastructure company Downer EDI Ltd (ASX:DOW) declined 1.72% to $3.99 yesterday. The Sydney Morning Herald is reporting that Downer EDI withheld payments to a supplier to meet its targeted end of year cash flow. The Herald has reportedly got hold of a leaked email that reveals senior executives of the company ordering all creditor payments to immediately stop so the company could meet its cash flow target with certainty at June 30. According to the report this is not the first time this has occurred and questions are now hanging over the company’s financial reporting. Downer EDI reported a profit of $189.38 million for the year to June 30, 2009.
Shares in Kerry Stokes Iron Ore Holdings Ltd (ASX:IOH) dropped 15.52% to $1.50 on Monday. The junior explorer says it has not yet reached an ore delivery agreement with Rio Tinto Ltd (ASX:RIO) for its Phil’s Creek project. In December the company agreed to sell Rio 1.5 million tonnes of iron ore per annum from its Phil’s Creek operation in the Pilbara of Western Australia and deliver the ore to Rio’s Yandicoogina site. Iron Ore Holdings says as yet negotiations have not resulted in the parties agreeing the terms of access by the required date. The company says if the parties are unable to agree the terms of access by August 8 then the Ore Sales Agreement will automatically terminate. For the 2009 financial year Iron Ore Holdings reported a loss.
There is just one company going ex-dividend today, and that is Aberdeen Leaders with a 3.75 cent fully franked dividend. Coming up on Friday is Programmed Maintenance Services.
To commodities, and the price of gold fell $17.60 to US$1,238.20 an ounce for the June contract on Comex. Silver is down 43 cents to US$18.67 and copper is 2 cents lower at $3.07 a pound.
And the price of oil fell $0.61 to US$78.25 a barrel for August light crude in New York.
