Australian shares are expected to dive at the open after US stocks closed sharply lower, as investors got smacked with a series of bad economic news.
That included disappointing news on the jobs front. The Labor Department reported that the number of people filing for unemployment insurance rose for the third time in a row, to 500,000, from 488,000 the week before.
Business activity in the US manufacturing sector is slowing down. The Philadelphia Federal Reserve's economic index took an unexpected dive in August, turning to negative 7.7 when analysts had expected a positive 7.5.
Meanwhile, the index of leading economic indicators, which measures the economy's future performance, increased a mere 0.1% in July. The result indicates slower growth through the end of the year.
The Dow Jones Industrial Average fell 144 points to close at 10,271. The S&P 500 Index is down 19 points 1,076 and the NASDAQ lost 37 points at 2,179.
European stocks finished lower; London’s FTSE closed down 92 points, Paris fell 76 and Frankfurt dropped 111 points.
Asian stocks gained: Hong Kong’s Hang Seng rose 50 points, Tokyo’s Nikkei gained 122 points and China’s Shanghai Composite added 22 points.
The Australian share market managed to finish slightly higher on Thursday. The S&P/ASX 200 Index added 4 points to close 4,479 and on the futures market the SPI200 is down 67 points. The Aussie Dollar is weaker against all of the major currencies at 7:30AM and was buying 89.2 US cents, 57.19 Pence Sterling, 76.12 Yen and 69.58 Euro cents.
Today in economic news: The Melbourne Institute releases its bulletin of economic trends.
In business news:Shares in Elders Ltd (ASX:ELD) closed flat yesterday at 71.5 cents on Thursday. The agri-business has responded to questions over the sudden jump in its share price amid speculation of takeover and consolidation activity in the sector. Elders has told the ASX that it’s not aware of any factor that would account for over a 15 per cent jump in its share price with 93.3 million shares changing hands. It follows moves earlier this week by two substantial shareholders who informed the ASX that they’d been building their stakes in Elders. There has also been expectations of further consolidation in the agricultural sector after Canada’s Agrium announced a $1.23 billion takeover offer for AWB Ltd. Looking at Elder’s net profit after tax results, the company reported a $466 million loss in 2009.
Shares in REA Group Ltd (ASX:REA) closed steady at $10.50 on Thursday. The company, best known in Australia for realestate.com.au, has managed to turn around its full year results after a loss the year before. REA Group, which is 60 per cent owned by Rupert Murdoch's News Ltd, has posted a net profit of $50.64 million for the 12 months to June 30, compared to a $34.6 million loss previously. The company attributes the results to strong organic growth across all areas of its operations, including enhancements in technology and a 25 per cent rise in property listings. REA Group says it will continue to strengthen and grow its businesses in online advertising and other related sectors of the real estate industry. REA Group’s 2009 net profit after tax was significantly lower than the two financial years before and was just under $1 million.
To commodities: the price of gold is up $4.10 to US$1,233 an ounce for the August contract on Comex. Silver dropped 7 cents to US$18.32 and copper is down 3 cents at $3.32 a pound.
And the price of oil slipped 99 cents to US$74.43 a barrel for September light crude in New York.
