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Welcome To The Australian Investor

US Market -10 May - Stocks Down on Record Commodity Prices

On Friday stocks plunged, with the Dow losing more than 100 points, after AIG's weak quarter revived worries about the credit crisis, and record oil and gas prices increased concerns about the threat of inflation.

The Dow Jones was down 0.94 per cent or 120.90 to 12,745.88. The Nasdaq was down 0.23 per cent or 5.72 to 2,445.52. Bond prices rose, lowering the yield on the benchmark 10-year note to 3.77% from 3.78% late Thursday.




Investors managed to overlook record oil and gas prices on Thursday, thanks to some better-than-expected April retail sales reports. However, the spike in commodities was a drag on equities Friday. AIG's big quarterly loss and Citigroup's announcement that it will sell off about $400 billion in assets contributed to the weak session.



Wal-Mart Stores, Kohl’s, J.C. Penney, and Nordstrom are among the many retailers due to report quarterly results next week. Profit reports are also due from Sprint Nextel, Hewlett-Packard and Freddie Mac.

Economic reports are due on consumer prices, retail sales, business inventories, manufacturing and housing.



Over the last few weeks, commodity prices have spiked due to supply concerns and continued global demand. The run-up has added to worries about how pricing pressure will impact consumer spending, which is already stretched as a result of the weak economy. Consumer spending fuels two-thirds of economic growth.



Late Thursday, AIG released a steeper-than-expected quarterly loss and reported it will look to raise $12.5 billion in capital. The news revived worries about the credit crisis, with AIG shares plunging 8.8%.



On Friday, Citigroup said that it plans to sell off around $400 billion in assets, or 20% of its total, over the next two to three years as a means of becoming more "fit" and profitable. The company plans to sell off non-core businesses in stages.

In addition to AIG and Citigroup, other big Dow losers included Alcoa, General Motors and DuPont.

In positive news, Activision shares hit a record high in active Nasdaq trade after the video-game publisher reported earnings that jumped from a year ago and topped estimates.

Nvidia shares also rallied in active Nasdaq trade after the company reported higher earnings that were short of analysts' forecasts.

The trade deficit dropped more than expected in March, as the demand for imports fell at a faster pace than the demand for exports, due to the impact of the weak US dollar.

The US dollar fell versus the euro and the yen. One Australian Dollar buys:

0.942642 USD
0.608625 EUR
0.482392 GBP
96.9129 JPY
1.22708 NZD

Gold prices rose $3.70 to $885.80 an ounce. A barrel of light sweet crude settled at a record $125.96 on the New York Mercantile Exchange, after hitting a trading record of $126.20 earlier.

Overseas, Britain’s FTSE 100 was down 1.05 per cent, France’s CAC 40 was down 1.88 per cent and Germany’s DAX was down 0.97 per cent.



ASX Afternoon Market Wrap – 9th May – Market Closes Above 5770

The Australian share market remained positive this afternoon, with stronger commodity prices overnight driving gains in resource stocks both locally and on Wall St.

At close of trade the ASX 200 had risen 48.6 points to 5771.8 and the All Ordinaries were up 43.5 points to 5844.4.

Additionally stronger than expected profit forecasts for The National Australia Bank reflected well on the market driving the bourse up at the close.

The majority of sectors had posted gains with the Health Care Sector posting the highest losses.

Telstra Corp Ltd has reaffirmed its earnings guidance for the 2008 financial year and further reported that its business continues to be in very good shape. Previous guidance forecasting earnings before interest and tax (EBIT) were reaffirmed to rise between six per cent and eight per cent in the 2008 financial year. The company additionally reiterated that earnings before interest and tax, depreciation and amortisation (EBITDA) were anticipated to increase four per cent to five per cent. Total revenue for 2007/08 is expected to also rise between three per cent and four per cent.

In company news, Supercheap Auto Ltd has reported it has experienced very pleasing trading performance in the second half of fiscal 2008 thus fare. Like-for-like sales have grown by six per cent in the 18 weeks to May 3, and by five per cent for Boating Camping and Fishing. The company has said that Supercheap Auto continues to perform very well benefiting from ongoing investment in refurbishing stores, ranging initiatives and an increased focus on driving units per transaction across the business.


The National Australia Bank Ltd has posted a 25.8 per cent increase in first half net profit and reported that credit growth is slowing in the United Kingdom and New Zealand however remains stronger in Australia. Net profit for the first half of fiscal 2008 rose to $2.687 billion and cash profit in the half was up eight per cent to $2.237 billion.

Maximus Resources LTD posted greatest gains up 15.5 cents or 114.81% to 29 cents.

Health Corp. LTD posted today’s greatest losses down 7.5 cents or 37.50% to 12.5 cents.

At 1617 AEDT the 12 GICS indices were:-

Discretion 1,943.2 up 20.2
Energy 17,827.2 up 102.0
Financials 5,479.2 up 56.6
Fin-x-property 5,783.9 up 87.1
Gold 5,623.5 up 72.1
Healthcare 9,557.7 up 99.8
Industrials 5,335.2 up 10.2
Info Technology 512.4 down 5.4
Materials 16,469.9 up 317.0
Metals and Mining 5,816.9 up 122.6
Property Trusts 1,714.9 down 14.4
Consumer Staples 7,830.7 down 82.0
Telecoms 1,579.1 down 11.9
Utilities 6,091.3 down 9.7

Individual stock performances

BHP Billiton was at $46.39 up $1.44. Rio Tinto was at $147.16 up $1.76.

Banks

Westpac at $25.92 up 23 cents. NAB at $32.38 up $1.38. ANZ at $23.02 up 85 cents. Commonwealth Bank was at $44.13 up 43 cents.

Media

News Corp at $20.69 down 23 cents. The Seven Network at $8.92 up 2 cents. John Fairfax at $3.42 up 4 cents.

Retail

Woolworths at $28.40 down 7 cents. Harvey Norman at $3.65 up 12 cents. David Jones was at $3.55 down 5 cents.

Toll Holdings at $8.57 down 15 cents. Qantas at $3.44 and stayed even.

Food

Coca Cola at $8.07 up 5 cents. Goodman Fielder at $1.79 down 15 cents.

Insurance

AMP was at $7.52 up 2 cents. QBE was at $25.48 up 3 cents. IAG was at $4.32 up 1 cents.

Gold

Gold have been mixed in today’s local session however looks to be heading for its first weekly advance in a month, holding yesterday's gains as record energy costs and a weaker US dollar boosted demand for a hedge against inflation.

Gold is currently trading at $US883.60 up $1.50 an ounce.

Oil

Crude oil futures rose to a record $US124.70 a barrel in New York overnight, following concerns that supplies of diesel and gasoline may be insufficient to meet increased consumption during the summer driving season.

One Barrel of light, sweet crude oil has risen US84 cents to $US124.53.

Dollar

The Australian dollar was trading marginally higher for this most of the afternoon after loosing almost half a US cent following the Reserve Bank of Australia's (RBA) latest quarterly statement on monetary policy.

At 1600 AEDT the Australia dollar was:

AUD/USD .9427
AUD/EUR .6099
AUD/GBP .4820
AUD/JPY 97.474
AUD/NZD 1.218

Latest International Stockmarket Indices
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Market News

[AUW] Australian Wealth Acquires Majority Interest in Ord Minnett.
12-May-2008

[GRY] Gryphon to Accelerate Exploration at its Banfora Gold Project.
12-May-2008

[URL] Tenement Acquisition.
12-May-2008

[BSL] Bluescope Steel Confirmed Stronger Second Half Result.
12-May-2008

[REA] REA Group Increases Stake in Casa.it.
12-May-2008

[WBC] St George and Westpac Merger Discussions.
12-May-2008

[CDT] Strong Gold Anomaly Define at Wa Project.
12-May-2008

[RNG] Range River Gold and NWME Signs MOU.
12-May-2008

[OAK] Oaks Nets $10.5 Million from MLR Sale and Signals Strong Forward Growth.
12-May-2008

[ERL] Acquisition Option Exercised Nine Months Early on Penny’s Find.
12-May-2008

Morning Mood - Oil
10-May-2008

Morning Mood - Dollar
10-May-2008

Morning Mood - Gold
10-May-2008

[PAG] Significant Expansion of PrimeAg with Darling Downs Acquisitions.
09-May-2008

[CRE] Project Loan Facility Repaid.
09-May-2008

[GLN] Proposed Acquisition of Six Exploration Tenements in Mozambique.
09-May-2008

[MUR] Uranium Drilling to Commence in Guinea, West Africa.
09-May-2008

[ASV] Tasmanian Government Places Order with Argus.
09-May-2008

[MIS] Midwest Corporation Nominates Yilgarn to Oakajee Port Tender.
09-May-2008

[ALB] Pre-Feasibility study Completed for Chirundu Uranium Project.
09-May-2008

[ZRL] VTEM Anomaly Define at Kangaluwi Copper Project.
09-May-2008

[ORH] Orient Signs Heads of Agreement to Acquire Ridwest Group.
09-May-2008

[SSN] Samson Oil & Gas Limited Sells Amber Field Properties for $US4.76 Million.
09-May-2008

[MXR] New Exploration Target at Canegrass Magnetite Zone.
09-May-2008

[WCU] Results of Uranium Drilling Program.
09-May-2008

[WDR] Western Desert in Further Expansion of Musgrave Block Holdings.
09-May-2008

[FNT] Frontier Resources Continuing to Define Significant Zone of Mineralisation at Komsen Prospect.
09-May-2008

[PMM] Portman Tenement Agreement.
09-May-2008

Morning Market Mood - Dollar
09-May-2008

Morning Market mood - Oil
09-May-2008

Morning Market Mood - Gold
09-May-2008

[URM] High Grade Phosphate Mineralisation Encountered on Urament Tenements.
08-May-2008

[MMZ] Mooter Agreement with Adap.tv.
08-May-2008

[RFE] Potential Oil Discovery at West Tulsa.
08-May-2008

[PEN] Widespread Uranium Anomalies at the Karoo Project in South Africa.
08-May-2008

[PSF] BioHeap Copper Recoveries Exceed Expectations.
08-May-2008

[ZFX] Jinchuan Accepts Zinifex’s Offer for Allegiance.
08-May-2008

[GER] Greenearth Energy Ltd and Green Power Energy Ltd Sign Agreement.
08-May-2008

[GIR] McPhee Creek iron ore Project Channel Iron Deposit Confirmed.
08-May-2008

[IIN] iiNet to Acquire Westnet.
08-May-2008

[NIO] Nickel Exploration Commences at Goongarrie East.
08-May-2008

[DJS] David Jones Sales Revenue of $453.3 Million for Q3.
08-May-2008

[HAV] Outstanding Copper Intersections in Kalkaroo Feasibility Drilling.
08-May-2008

[RDM] Drilling Initiated at Robins Rise Project.
08-May-2008

[BNB] Increase in Committed Capital for Investments in north American Infrastructure Opportunities.
08-May-2008

[ACE] Thai Sales Order for $500 000.
08-May-2008

Morning Market Mood - Dollar
08-May-2008

Morning Market Mood - Oil
08-May-2008

Morning Market Mood - Gold
08-May-2008

[ZYL] Zylotech Wins Temora Shire Safe City Contract.
07-May-2008

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