The Australian share market is likely to open slightly higher this morning after Wall Street staged a late comeback despite an earlier sell off that was triggered by another round of weak housing news.
Looking closer at that economic news: The end of the $8,000 homebuyer tax credit has certainly had an impact on housing. New home sales fell 12.4% in July, to a seasonally adjusted annual rate of 276,000, compared to 315,000 in June.
The government also reported that the median house price fell almost 6% in July to $204,000.
Looking at how the numbers finished, the Dow Jones Industrial Average closed 20 points higher at 10,060. The S&P 500 Index is up 3 points to 1,055 and the NASDAQ added 18 points at 2,142.
European stocks closed lower; London’s FTSE shed 47 points, Paris is down 41 and Frankfurt slipped 36 points.
Asian markets finsihed weaker: Hong Kong’s Hang Seng down 24 points on Wednesday, Tokyo’s Nikkei plunged 150 points and China’s Shanghai Composite is down 54 points.
The Australian share market was dragged lower on Wednesday on fresh fears of a double-dip recession in the US. The S&P/ASX 200 Index closed down 61 points at 4,320 and on the futures market the SPI200 is up 15 points. The Aussie Dollar gained against the major currencies overnight and at 7:30AM was buying 88.51 US cents, 57.23 Pence Sterling, 74.92 Yen and 69.94 Euro cents.
In local economic news: ABS private new capital expenditure and expected expenditure for the June quarter.
In business news: Shares in BHP Billiton Ltd (ASX:BHP) slipped 0.27 per cent to close at $37.44 on Wednesday. BHP Billiton’s chief executive Marius Kloppers has flagged a mixed outlook for global short-term commodities, as the company reported a 16.3 per cent increase in profit for 2010. The world's largest miner posted the rise in attributable profits excluding exceptional items of $US12.46 billion up from $US10.72 billion. The result was slightly above market forecasts and followed a broad recovery in prices and revenue for BHP. But the miner cautioned that demand for commodities remains heavily dependent on emerging markets as government stimulus comes to an end in many parts of the world. BHP Billiton reported a $7.2 billion net profit after tax in 2009.
Shares in Seven Group Holdings Ltd (ASX:SVW) were down almost one per cent to $6.10 on Wednesday. Brighter results at Seven have put the company in a more confident mood and it’s reportedly on the hunt for acquisitions. The Australian Financial Review reports that Seven’s chief executive Peter Gammel said that the company’s radar continues to be switched on for future growth over the next 12 months. His comments come as Seven reported a better than expected net profit of $718 million for the two months to June 30. Seven also provided pro forma numbers showing total revenue for a combined Seven and Westrac was $2.41 billion in the 12 months to June 30. Seven reported a net profit after tax of around $12.5 million in 2009.
To ex-dividends, Carlton Investments with a 40 cent fully franked, CVC, 3 cent fully franked, and Downer EDI 16 cent unfranked are among those companies going ex-dividend today.
To commodities: the price of gold is up US$7.70 to US$1,239 an ounce. Silver edged up 65 cents to US US$19.02, copper is down 3 cents at US$3.21 a pound. And the price of oil rose 89 cents overnight to US$72.52 a barrel for October light crude in New York.
