The Australian market looks to extend yesterday's losses following another disappointing day on Wall Street. US stocks fell as a weak consumer spending report stoked fears of an economic slowdown. Investors instead turned to safe haven assets, with the price of gold continuing its record run.
US economic news
The Commerce Department reported that Americans kept their wallets closed in June. Despite forecasts for a rise personal spending eased 0.2 per cent, the largest fall in almost two years. Personal income however, increased 0.1 per cent in the same month.
Figures
On Tuesday, the Dow Jones Industrial Average fell 266 points to close at 11,867, the S&P500 lost 33 points to close at 1,254 and the NASDAQ dropped 75 points to close at 2,669.
European stocks closed lower: London’s FTSE down 56 points, Paris down 65 and Frankfurt was down 157 points.
To Asian markets, stocks closed lower: Hong Kong’s Hang Seng was down 242, Tokyo Nikkei was down 120 and China’s Shanghai Composite was down 25 points.
The Australian share market dropped 1.427 per cent on Tuesday: The S&P/ASX 200 Index fell 64 points to close at 4,434. On the futures market the SPI is down 76 points.
Currencies
The Australian Dollar at 7:30AM was buying $1.0783 US cents, 66.19 Pence Sterling, 83.1 Yen and 75.95 Euro cents.
Economic news
Due out today from the Australian Bureau of Statistics is International Trade in Goods and Services data and Retail Trade data, both for June. From the Australian Industry Group/Commonwealth Bank, their Performance of Services Index for July.
Company news
Yesterday shares in Wesfarmers Limited (ASX:WES) fell 1.51 per cent to close at $29.45. Wesfarmers owned-Coles is gearing up to tackle its rival, fellow supermarket giant Woolworths Limited (ASX:WOW), in the booze department. Coles is planning to boost its 19 per cent share of the packaged liquor market through implementing $130 million in liquor discounts, restructuring its current liquor stores and opening up to 183 stores in the next four years. Last week Wesfarmers posted growth in its food and liquor division, with full year sales rising 6 per cent to $25.025 billion. In the first half of its 2011 financial year Wesfarmers posted a net profit of $1.17 billion.
Shares in Drill Torque Limited (ASX:DTQ) closed at $0.255 yesterday on the company’s first day of trade on the Australian Securities Exchange. It was a strong debut, finishing at a $0.055 cent premium to its issue price of $0.20. The company describes itself as one of the largest contract drilling companies based in Queensland with a fleet of 31 drill rigs in Townsville and Cloncurry. The IPO was run by RBS Morgans and Pitt Capital Partners and the company listed with a market cap of $25 million. In the 2012 financial year Drill Torque is expected to deliver $58 million in revenue and a net profit of around $5 million.
Ex-dividends
Two companies are going ex-dividend today and they are Ozgrowth with a $0.01 fully franked dividend and Westoz Investment Company with an $0.08 fully franked dividend. Coming up tomorrow is Singapore Telecommunications.
Commodities
Gold is up $22.80 to $US1,644 an ounce for the December contract on Comex, silver is up $0.78 to $40.09 for September and copper is down $0.02 at $4.40 a pound. Oil is down $1.10 at $93.79 a barrel for September light crude in New York.
