The Australian share market is tipped to get off to a slightly higher start this morning as Wall Street closed modestly lower as investors focused on the latest US jobs report, which pointed to signs of a sluggish economic recovery.
The Labor Department said initial unemployment claims rose 19,000 to 479,000 last week, which was more than many economists were expecting and the highest rise in three months.
The report comes ahead of the Labor Department's monthly jobs report, still to come on Friday US time. That’s expected to show a 1% rise in the unemployment rate to 9.6%.
On the retail front: Sales tracker Thomson Reuters, which looks at retail sales across 28 chains, reported a 2.9% increase in like-for-like sales, after growth of 3.1% in June.
Checking the Wall Street scoreboard, The Dow Jones Industrial Average slipped 5 points to 10,675. The S&P 500 Index is down 1 point to 1,126 and the NASDAQ lost 11 points at 2,293.
European stocks finished mixed; London’s FTSE is down 20 points, Paris is up 3 points and Frankfurt added 2 points.
To our local region now.Asian markets closed mixed on Thursday: Hong Kong’s Hang Seng up 2 points, Tokyo’s Nikkei jumped 165 points and China’s Shanghai Composite is down 18 points.
Australian shares finished stronger yesterday, on the back of takeover speculation in the resources sector. The S&P/ASX 200 Index firmed 24 points to close at 4,567 and on the futures market the SPI200 is up 3 points. The Aussie Dollar at 7:25AM is weaker against the major currencies and was buying 91.54 US cents, 57.6 Pence Sterling, 78.58 Yen and 69.43 Euro cents.
In local economic news: The Reserve Bank’s latest Statement on Monetary Policy is out today and the July performance of construction index (PCI) is being release by Australian Industry Group together with the Housing Industry Association.
In business news: Shares in Rio Tinto Ltd (ASX:RIO) finished up 0.23% at just over $73 on Thursday. The global miner’s chief executive Tom Albanese is looking to the future with confidence despite admitting that he expects the global economy to be unpredictable. His comments come as Rio posts a 125% rise in first half underlying earnings of $6.34 billion, more than double the result a year earlier, thanks to a recovery in metals prices and strong demand from China. Rio Tinto has also cut net debt from $US19 billion to $US12 billion and says it’s committed to spending $US13 billion on new and existing growth projects over the next 18 months. Mr Albanese says while he expects that economic activity will remain volatile, Rio’s long-term picture continues to be intact. Rio Tinto reported a net profit after tax of $5.4 billion for the year ending 30 December 2009.
Shares in Woolworths (ASX:WOW) rose 1.09% to close at $26.06 on Thursday. Private-label food brands are proving more and more popular with grocery shoppers seeking to reduce their food bills. A new report has forecasts that nearly a third of all shopping trolleys will be filled with private-label items such as Woolworths Select and Wesfarmer’s Coles brand by 2015. An IBISWorld report says private labels account for 20 per cent of annual grocery sales for Woolies and Coles, while discount supermarkets like Aldi account for 3 per cent of the domestic market. Woolworths chief executive Michael Luscombe recently said that he sees the ‘Select’ private label as playing an enormous part of the retailer's future growth strategy. Woolworths posted a $1.8 billion net profit after tax in the year ending 30 June 2009.
To ex-dividends going today: Finbar Group is going with a 5.5 cent fully franked dividend and Transmetro Corporation, paying a 3 cent fully franked dividend. And kicking off next week the companies going ex-dividend on Monday are Careers Multi-list, Coal & Allied Industries, Energy Resources and FFI Holdings.
To commodities, and the price of gold added $3.50 to US$1,197 an ounce for the August contract on Comex. Silver rose 5 cents to US$18.31 while copper is down 5 cents at $3.35 a pound.
And finally the price of oil fell 46 cents to just over US$82 a barrel for September light crude in New York.
