Morning Market Report, Jul 22, 2008

Our market is down 46 today not helped by a series of really crappy after hours results on Wall Street overnight. The Dow Futures are currently predicting a 103 point fall in the US tonight, our futures suggested a 32 point fall this morning.

The Dow Jones fell 29 – Up 63 at best. Down 73 at worst. Before the after-market onslaught, we saw better-than-expected earnings results from Bank of America, pushing financials up initially 2.8%, but only managed to close up 0.39% – profit taking after last weeks mammoth 11.4% hike. Techs down 1.76% on poor results from Texas and Apple – Apple’s 3Q profit was up 31% but revenue and earnings missed expectations – it also forecast that 4Q earnings would be well below analyst’s expectations. The Oil price also finished higher or the first time in 5 days (up $2.16 to $131.04) as Tropical Storm Dolly moves into the Gulf of Mexico and is expected to reach hurricane strength today and could threaten some coastal refineries later in the week. Energy sector up 3%. Iran has also been given two weeks to pull back their nuclear program or suffer further sanctions. American Express down 11.12% in after hours trading on results. Apple down 10% after hours. Texas Instruments down 12% after hours. SandDisk down 12% after hours. CapitalOne down 5.4% after hours. .

A lot of research and commentary on Orica after they announced after hours yesterday that they will the split off their consumer division to cut debt and fund growth and conduct a $900m capital raising. Orica will remain in a trading halt for the next couple of days. It wants to speed up its transformation into a mining services company and they will clearly become much more sensitive to the mining cycle. Credit Suisse, ABN AMRO and UBS Warburg have all reacted negatively to the stock this morning.

Property Trusts Struggling as a result of Mirvac Group (MGR) saying it expects operating earnings of $352m or 33.4c a security for the year, beating its distribution of $349m or 32.9c a security. It also said operating earnings guidance for this fiscal year is $268m-$292m, or 23-25c a security, and a distribution of $235m, or 20c a unit. GSJB Were said the company’s guidance was below their expectations but they did manage to draw a few positives out of it. MGR down 10% first thing.

Oxiana – name to be changed to OZ Minerals tomorrow – has provided 2Q Production Numbers. Production in line with expectations, with Golden Grove (lower zinc and copper production) being the exception. OXR up 6% to 211c.
CSL (CSL) struggling after rival Merck confirmed disappointing sales of Gardasil – down 9% in the 2Q – and cut its 2008 Gardasil forecast to US$1.4bn-US$1.6bn range from US$1.9bn-US$2.1bn. CSL down 8.1% to 3373c.

Compass Resources (CMR) struggling on news that their Brown oxide project cost has blown out to $175m from $140m in December, with the blowout funded by a $US24m loan. CMR down 9.5% to 147.5c.
Murchison Metals (MMX) have released their 4Q FY08 Production report. Mined ore up 11% from March Q. MMX up 4c to 299c.
Mt Gibson (MGX) Qly report after hours last night– profit a bit better than expected. Production in line. Shipments affected by some port issues but still pretty impressive. MGX up 11.1% 259c.
Kingsgate Consolidated (KCN) said mining will commence within weeks at Chatree North in Thailand after final ministerial approval was granted on its mining lease. KCN up a big 24% to 585c.
SP Ausnet (SPN) – Moody’s Investors Service has revised the outlook on the company’s A1 rating to stable from negative. SPN 0.5c to 114.5c.
Sino Gold (SGX) said 2Q gold output was up 14% from last year to 35,412 troy ounces. It has left production guidance for the year unchanged at 150,000 to 160,000 ounces. SGX up 31c to 578c.
Macmahon Holdings (MAH) announced it has been successful in an application to remedy a legal technicality raised by Ausdrill in relation to the MAG takeover offer. MAH unchanged 161c.
Credit Suisse has cut Macquarie Group’s 2009 FY earnings estimates by 5% ahead of its AGM tomorrow. MQG down 2.7% to 4680c.
Qantas Airways (QAN) have provided traffic and passenger statistics for May. Passenger numbers up 3.9% from last year, Revenue seat factor up 0.3%. QAN down 10c to 331c.
Atlas Iron Ore (AGO) have released a development update on their Pardoo Project. AGO down 20c to 274c.
Nick Fallon will remain Ten Network’s (TEN) executive chairman up until at least September 2009 but will reduce his time commitment to the network by 50%. The stock has almost halved in value in the past year. TEN up 3c to 150c.
Grain companies mixed despite the U.S. Department of Agriculture lifting its 2008 Australian wheat forecast July 12 to 25 million tons, almost double last year’s drought-affected crop.
Patersons have reviewed the Nickel Sulphide stocks and advice investors to BUY the sector. PAN, MCR, IGO cashed up and debt free – share buybacks possible. PAN down 3.3%, MCR down 1.4% and IGO up 2.1%.