News: Outlook: SPI points to positive start

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    Following a day of heavy losses the Australian share market looks set to take a breather this morning. The SPI is pointing to a positive start, after US stocks clawed out of the red in a volatile session to snap a losing streak and end higher. 

    US economic news

    Ratings Agency’s Fitch Ratings and Moody’s Investors Service have maintained America’s AAA rating after the country struck a last minute debt deal to avert default.

    Challenger, Gray & Christmas has reported that the amount of planned job cuts increased 60 per cent in June to 66,414. The outplacement consulting firm said the result was due to firms downsizing rather than adding to their payrolls.

    Another jobs report from ADP showed that the US private sector added 114,000 jobs in July, coming in higher than expectations.


    On Wednesday the Dow Jones Industrial Average added 30 points to close at 11,896, the S&P500 lifted 6 points to 1,260 and the NASDAQ gained 24 points to close at 2,693.

    European stocks fell: London’s FTSE closed 134 points down, Paris was down 68 and Frankfurt was down 156 points. 

    To Asian markets, stocks also dropped: Hong Kong’s Hang Seng was down 429, Tokyo Nikkei was down 207 and China’s Shanghai Composite eased almost 1 point.


    The Australian share market shed 2.274 per cent on Wednesday: The S&P/ASX200 Index slumped 101 points to close at 4,333. On the futures market the SPI is 12 points higher.


    Turning to currencies and the Australian Dollar at 7:40AM was buying $1.10769 US cents, 65.53 Pence Sterling, 83.02 Yen and 75.18 Euro cents.

    Company news

    Yesterday shares in Myer Holdings (ASX:MYR) closed at a low of $2.25, in a day of heavy selling in the retail sector after yet another batch of disappointing retail sales data. However, it has not deterred US-based Harris Associates, with a substantial shareholding notice revealing the funds manager has now become Myer’s fourth-largest shareholder with a 5.08 per cent interest in the retailer. Harris holds stakes in a number of locally listed companies, such as Primary Health Care Limited (ASX:PRY), Foster's Group Limited (ASX:FGL) and Orica Limited (ASX:ORI), and also yesterday said it had increased its stake in Goodman Fielder Limited (ASX:GFF). In the first six months of its 2011 financial year Myer posted a net profit of $106.7 million.

    Shares in Sundance Resources Limited (ASX:SDL ) closed 1.94 per cent down on Wednesday at $0.505. Sundance’s Chairman George Jones has confirmed the iron ore explorer is hoping to secure a takeover or joint venture by the end of this year. Sundance last month received a $1.4 billion takeover offer from its largest shareholder, China’s Hanlong Mining. However, the company’s flagship Mbalam Iron Ore Project in West Africa is still waiting on government approval, and, needs to secure financing. Mr Jones believes once these issues are cleared a takeover of JV deal could be on the cards. In the last half of 2010 Sundance Resources booked a net loss of $9.2 million.


    The only company going ex-dividend today is Singapore Telecommunications with an unfranked dividend of 14.45 cents. 


    Gold is up $21.80 to $US1,666 an ounce for the December contract on Comex, silver is up $1.67 to $41.76 for September and copper is down $0.07 at $4.33 a pound. Oil is down $1.86 at $91.93 a barrel for September light crude in New York.

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