The Australian share market has received a weak lead from US markets overnight and the benchmark crude oil contract fell below $US77 a barrel.
Wall Street stocks tumbled after Federal Reserve Chairman Ben Bernanke said the US economic outlook appears “unusually uncertain”, which only fuelled concern about the recovery and the possibility of another recession.
Bernanke acknowledged the labor market's continued weakness while offering few specific options to stimulate lending and investment.
Also overnight, US President Barrack Obama signed the Wall Street reform bill into law, enacting the most far-reaching financial overhaul since the Great Depression.
On Wednesday, the Dow Jones Industrial Average closed 109 points weaker at 10,121. The S&P 500 Index lost 14 points at 1,070 and the NASDAQ is down 35 points at 2,187.
European stocks were higher; London’s FTSE rose 75 points, Paris is up 26 and Frankfurt closed 23 points stronger.
Asian markets were mixed: Hong Kong’s Hang Seng is up 223 points, Tokyo’s Nikkei is down 22 and China’s Shanghai Composite added 7 points.
The Australian share market managed to finish slightly higher yesterday with The S&P/ASX 200 Index up 9 points higher at 4,413 and on the futures market the SPI200 is down 49 points. Turning to currencies and the Aussie Dollar at 7:30AM was buying 87.7 US cents, 57.82 Pence Sterling, 76.32 Yen and 68.75 Euro cents.
In local economic news: the National Australian Bank business survey for the June quarter.
In companies reporting today: June quarter production reports are due from Santos Ltd, Newcrest Mining Ltd and Beach Energy Ltd, while Petsec Ltd releases its June quarter and first half results.
In business news: Shares in Woolworths Ltd (ASX:WOW) closed 1.84% lower yesterday at $26.19. Woolworths says it’s been trimming prices on nearly 5,000 grocery products in an effort to encourage consumer spending and stay competitive. In an interview with the Australian Financial Review, the company’s chief executive Michael Luscombe said the price of food has both stabilised and also got cheaper over the past 12 months. His comments come after the country’s largest retailer reported a 4.2 per cent increase in full year sales to $51.6 billion yesterday. Woolworths says to achieve the result, price cuts on food have been necessary in the current environment as households face pressure from other areas like electricity, health and education. Woolworths posted a $1.8 billion net profit for the year ending 30 June, 2009.
Shares in Telstra (ASX:TLS) closed slightly lower yesterday, slipping 0.62% to $3.22. The telecommunications giant is set to wield the axe and slash 10 per cent of its 300 strong executive team as a part of the company's drive to simplify the business and focus on customer service. The redundancies are set to apply to senior executives and some very senior managers with the process to start as early as today. There are also reports that Telstra plans to shed another 300 more junior executive positions. Staff cut backs largely affect those on six-figure salaries and who are based in head offices in Sydney and Melbourne. The company says that the redundancies are part of a move to simplify decision making, reduce the number of sign-offs and consolidate roles that are similar. Telstra recorded around a $4 billion net profit in the financial year to June 30 2009.
To commodities, and the price of gold is up 10 cents to US$1,191.60 an ounce for the July contract on Comex. Silver is up 11 cents to US$17.80 and copper is up 9 cents at $3.09 pound.
The price of oil is down $1.02 to US$76.56 a barrel for September light crude in New York.
