The Australian share market has received mixed leads from overnight trading but is set to open lower as US stocks fell for a third session in a row, metals prices however ended higher.
Wall Street lost ground as investors digested an unexpected rise in jobless claims and a more cautious outlook from computer networking giant Cisco Systems
In economic news: The Labor Department said 484,000 people filed initial jobless claims in the week ending 7 August, which is 2,000 more claims than the 482,000 filed in the week before. Many economists were expecting a fall in claims.
And in other news, Import prices rose 0.2% in July, and were up 4.9% from a year earlier. The advance was led by higher fuel prices. While export prices fell 0.2% in July, but were up 3.9% from 2009.
Thursday on Wall Street, the Dow Jones Industrial Average closed down 59 points to 10,320. The S&P 500 Index fell 6 points at 1,084 and the NASDAQ shed 18 points at 2,190.
European stocks were mixed; London’s FTSE up 21 points, Paris dropped 7 and Frankfurt is down 19.
Asian markets were lower: Hong Kong’s Hang Seng plunged 189 points, Tokyo’s Nikkei lost 80 points and China’s Shanghai Composite fell 32 points.
Weak offshore leads and a disappointing result from Telstra sent the Australian share market lower on Thursday. The S&P/ASX 200 Index closed down 55 points at 4,401 and on the futures market the SPI200 is down 11 points. The Aussie Dollar at 7:40AM was higher against the major currencies, and was buying 89.6 US cents, 57.55 Pence Sterling, 77 Yen and 69.86 Euro cents. Making business news this morning: Shares in Rio Tinto Ltd (ASX:RIO) closed 1.79% lower to $69.82 on Thursday. The mining giant will proceed with a $10.25 billion internal buy-back of shares held by subsidiary Tinto Holdings Australia Pty Ltd. The buy-back has already been flagged and was approved by the company's shareholders at its recent annual meeting. Rio plans to get back all of Tinto Holdings' shares in two tranches, with the first phase expected to take place this month. Analysts believe the buy-back reflects Rio's decision to clean up its balance sheet, with the company having increased its revenues from iron ore and outstanding debt. Rio Tinto reported an increase in net profit after tax in 2009 of just over $5.4 billion.
Shares in Myer Holdings Ltd (ASX:MYR) closed 4.6 per cent higher to $3.64 on Thursday. Myer looks primed for growth and is hoping that improvements in consumer spending will continue with Christmas on the horizon. Myer raised its guidance yesterday and said it expects full-year earnings before interest and tax of between $265 million and $272 million. Fourth-quarter sales fell less than expected, dipping 1.4 per cent to $815.8 million. Chief executive Bernie Brookes sighted improved sales in exclusive brands and a reduction in shoplifting as factors helping the result. He also said sales rebounded in July and into August, and Myer’s management team is hoping the momentum will carry through to a better Christmas. Myer reported a net profit after tax of $104 million for the year to 30 July 2009.
Going ex-dividend today: AFIC 13 cent fully franked. Alumina 2.23 cent fully franked and Koon Holdings with around a 0.7 cent unfranked dividend.
To commodities, and the price of gold jumped $17.30 overnight to US$1,214 an ounce for the August contract on Comex. Silver rose 16 cents to US$18.05 and copper added 3 cents at $3.28 a pound.
The price of oil is down $2.28 to US$75.74 a barrel for September light crude in New York.
