Stocks extend slide on global rout
Wall Street below 10,000 Shares dive in global market rout Chris Zappone October 7, 2008 - 10:58AM Australian shares fall sharply after overseas markets dived overnight, while worries about global economic growth sent the Aussie dollar to a 3-year low. The benchmark S&P/ASX200 index was down as much as 3.3%, or 148.5 points, to 4391.9 in early trading. The Australian dollar traded at 72.18 US cents, after tumbling to as low as 69.85 US cents overnight, its weakest since September 2004, according to Bloomberg. It also plunged against the yen, dropping to about 71 yen before recovering some of the loss to trade recently at about 73 yen. A sharply weaker Aussie dollar, though, is unlikely to deter the Reserve Bank from cutting interest rates by half a percentage point later today, to stimulate the economy amid a slump in domestic demand. The market is expecting the central bank's board to trim the interest rate to 6.5% from 7%, its largest rate cut since April 2001. The RBA's decision will be announced at 2.30pm. Broad retreat All sectors in the sharemarket were down sharply, with banking and resources the hardest hit. ANZ Bank fell as much as 3%, or 55 cents, to $17.50, the Commonwealth Bank also lost 3%, or $1.32, to $42.68, NAB lost 3%, or 77 cents, to $24.78 and Westpac lost as much as 2.2%, or 50 cents, to $22.00. Investment bank Macquarie Group fell as much as 6%, or $2.10, to $32.90, while smaller rival Babcock & Brown lost as much as 18%, or 29 cents, to $1.32. In the resources sector, BHP Billiton was down as much as 3.3%, or 99 cents, to $28.80, while Rio Tinto lost as much as 3.5%, or $2.98, to $81.50. Fortescue Metals Group extended its recent rout, plunging 12%, or 51 cents, to $3.90. 'Raw fear' "What we're seeing now is irrational fear," said Peter Strachan of StockAnalysis. "It's raw fear." "Once people get over that, from the Australian point of view, things aren't that bad." Not only does Australia boast four of the highest-rated banks in the world, even the plunging Australia dollar has kept commodities prices buoyant in local-currency terms, he said. "Certainly the falling Australian dollar will offset falls in Australian commodity prices," said Lachlan Shaw, commodities strategist at CommSec. "Particularly for iron ore and coal price contracts which extend out to March 2009." The effects of the plummeting Australian dollar depends on the company and their foreign exchange hedge book. "The exact timimg depends of the benefit depends on each company's circumstance." "But certainly a falling Australian dollar is good for exporters." The price of nickel fell down US$900, to US$14,250 a tonne overnight. However, this morning in Australian dollars, it actually gained $304 to $19,880, Mr Strachan said. Copper, zinc and aluminum recorded the same disparity in price movements, falling in US dollars but gaining in Australian currency. "It's illogical to sell Australian metals stocks because at the end of the day, they have costs in Australian dollars." "You're paying wages in Australian dollars and getting paid in Australian dollars." Gold miners were mixed, with Lihir up as much as 1.6%, or 4 cents, to $2.55, and Newcrest down as much as 7.3%, or $1.94, to $24.50. Race against time Others blamed the continued fallout from Wall Street. The US government's US$700 billion bailout package, passed over the weekend in Washington, won't provide immediate relief investors had hoped for, one analyst said. "The government package is going to be reasonably slow to be implement," said David Spry, research manager with F.W. Holst & Co. "It's going to take time and the market doesn't have a lot of time," he said. For banks, liquidity levels have not improved and will not for some time. "The banking crisis is now an economic problem." All things considered, today's fall isn't a bad performance considering Wall Street's overnight plunge, Mr Spry said. The fear that's driving the market arises from the fact nothing has really changed in the market and uncertainty remains, he said. "Normally the falling dollar would be good but you've got to look at why it's falling," Mr Spry said. "Investors see Australia as potentially risky." Even a short-term benefit from the Aussie's dollar's drop translates into a weaker outlook for commodities in 2009-2010, which doesn't bode well for the resource industry. Wall Street joined in a worldwide cascade of despair on Monday over the financial crisis, driving the Dow Jones Industrial Average to its biggest ever intraday loss. The catalyst for the selling was investors' growing despair that the credit crisis will take a heavy toll around the world, realising that the Bush Administration's $US700 billion rescue plan and steps taken by other governments won't work quickly to unfreeze credit markets. The Dow Jones Industrial Average fell as much as 800 points during the session, slipping below the key psychological level of 10,000 for the first time since 2004. The blue-chip index closed down 369.88 points, or 3.58%, at 9955.5. The Nasdaq composite fell 4.34% and the S&P500 index lost 3.85%, halving early losses. Shaw Stockbroking senior dealer Jamie Spiteri said the local market was weaker as a result. "Concern and uncertainty remain,'' Mr Spiteri said. "It's very hard to anticipate how long the repair job is going to take across financial markets at the moment.'' Mr Spiteri said the local market was affected by outside influences and not any untoward domestic influence. "The anticipation is now that we are going to have a slowing economy here in Australia, despite the fact that we are in a situation where we are a lot better balanced than most other major economies around the world. " "But at the same time, we are still just a small player in a global economy which is slowing significantly at the moment.'' Crude oil nosedived below $US90 overnight, with New York's main contract, light sweet crude for November, down $US6.07 to $US87.81 a barrel. In the energy sector, Woodside Petroleum was down as much as 5.6%, or $2.75, to $46.25, while Santos was down 5.5%, or 95 cents, to $16.25. The retailers were also down - Woolworths was off as much as 1.2%, or 33 cents, to $27.80, Wesfarmers was down as much as 2.9%, or 80 cents, to $26.50 and Harvey Norman lost as much as 4.6%, or 13 cents, to $2.68. The media sector was mixed. Consolidated Media Holdings lost 9 cents to $2.07 and Fairfax fell 12 cents, or 4.8%, to $2.38. News Corp added 40 cents, or 2.8%, to $14.69 and its non-voting stock gained 44 cents, or 3.14%, to $14.44. Qantas gained 4 cents to $3.04 and Virgin Blue was steady at 33 cents. The most traded stock by volume was Tanami Gold, with 35.54 million units changing hands worth $35,563. Tanami Gold shares fell 0.1 cent, or 50%, to 0.1 cent. Market turnover was 401.56 million shares, valued at $1.02 billion, with 85 stocks up, 830 down and 202 unchanged. [EMAIL PROTECTED] Microsoft to the rescue!!!!! BusinessDay, with AAPOn Oct 7, 10:53 am, Gaar <[EMAIL PROTECTED]> wrote: > http://www.huffingtonpost.com/2008/09/22/microsoft-announces-40b-s_n_... > > Microsoft Announces $40B Stock Buyback > > Some Yahoo shareholders are still praying Microsoft will once again > ride to their rescue, this time with a bid in the mid-to-high $20s. > This price would have sounded outrageous six months ago, when > Microsoft was getting ready to raise its Yahoo bid to $33, but now, > with Yahoo's stock back below $20, it sounds just fine. > > Unfortunately, Microsoft's announcement this morning makes it slightly > less likely. Microsoft just launched another stock buyback program, > giving it the ability to buy $40 billion-worth of its own stock over > the next five years. > > On Oct 6, 4:49 pm, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > > > They are listed on the home page of the Age website just as they are, > > one after the other. I'll never have time to read them all! > > > On Oct 7, 7:21 am, Gaar <[EMAIL PROTECTED]> wrote: > > > > I'll trust their SEC Filings, and NOT some Article you cite, thanks. > > > > On Oct 6, 1:05 pm, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > > > > > If they have got it, they better hold on to it. Although the ariicle > > > > would suggest otherwise. > > > > > Latest Headlines from the Melbourne Age. > > > > > Latest Business Coverage > > > > Europe battles to contain crisis > > > > Emerging market stocks fall most ever > > > > Gold jumps as investors seek haven > > > > Oil falls below $US89 on demand fears > > > > Europe stocks suffer sharpest slide since 1987 > > > > Dollar crashes to three-year low > > > > Belgian PM meets with Dexia shareholders > > > > Wachovia in limbo amid court battle > > > > Aussie dollar falls to three-year low > > > > Oil hits eight-month low under $US90 > > > > > Goodnight capitalism > > > > > On Oct 7, 7:00 am, Gaar <[EMAIL PROTECTED]> wrote: > > > > > > MSFT has over $20 BILLION in Cash... > > > > > > On Oct 6, 12:56 pm, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > > > > > > > It's over Gaar > > > > > > > Microsoft, Schering-Plough See `Entire Economy' in Jeopardy > > > > > > > By Dina Bass and Shannon Pettypiece > > > > > > Enlarge Image/Details > > > > > > > Sept. 30 (Bloomberg) -- Officials from Microsoft Corp. to Office > > > > > > Depot > > > > > > Inc. and Schering-Plough Corp. said the government's failure to bail > > > > > > out the U.S. banking industry put the ``entire economy'' at risk > > > > > > unless a deal comes soon. > > > > > > > ``The various sectors of the economy are so intricately linked, we > > > > > > need to recognize that the entire economy turns on what happens > > > > > > here,'' Microsoft General Counsel Brad Smith said in an interview > > > > > > after the House of Representatives voted 228 to 205 yesterday > > > > > > against > > > > > > giving Treasury Secretary Henry Paulson the authority to buy > > > > > > troubled > > > > > > assets from financial companies. > > > > > > > ``It is a pity that this has developed into such a mess,'' said Fred > > > > > > Hassan, chief executive officer of drugmaker Schering- Plough in > > > > > > Kenilworth, New Jersey. ``The probability of recession has gone > > > > > > up.'' > > > > > > > Disbelief > > > > > > > General Electric Co., with businesses that span real estate, > > > > > > consumer > > > > > > finance, aerospace, energy equipment, media and health care, has > > > > > > talked with leaders in the House to express support for the bill, a > > > > > > person familiar with GE's efforts said. > > > > > > > Business officials expected the bill to pass, even with government > > > > > > leaders predicting a tight vote. That's why companies didn't speak > > > > > > up > > > > > > sooner about how important the legislation was, Microsoft's Smith > > > > > > said. > > > > > > > ``I absolutely cannot believe it,'' said David Cosper, chief > > > > > > financial > > > > > > officer of Sonic Automotive Inc., the third- largest U.S. publicly > > > > > > traded auto retailer. ``I don't think the House knows what they're > > > > > > doing. We need this, the markets are frozen, banks are being taken > > > > > > over -- it's a crisis. I think they're leaving it in the lurch and > > > > > > going on a break.'' > > > > > > >http://www.bloomberg.com/apps/news?pid=20601087&sid=a0h7E2HwQpUk&refe... > > > > > > > Bank Writeoffs May Triple as Bond Spreads Fall on TARP (Update2) > > > > > > By Jody Shenn and Caroline Salas > > > > > > > Oct. 6 (Bloomberg) -- The U.S. Treasury's $700 billion plan to > > > > > > rescue > > > > > > the nation's banks from the subprime mortgage debacle may help bonds > > > > > > rebound from losses of at least 90 percent while contributing to > > > > > > writedowns at financial institutions. > > > > > > > The Troubled Asset Relief Program, or TARP, signed into law by > > > > > > President George W. Bush Oct. 3, allows banks to sell toxic assets > > > > > > above current prices, driving down yields on some bonds relative to > > > > > > benchmarks, said Eugene Flood, chief executive officer at Smith > > > > > > Breeden Associates Inc., which manages $27 billion in fixed-income > > > > > > assets. Spreads may retrace a quarter of their widening since the > > > > > > credit crisis began, Flood said. > > > > > > >http://www.bloomberg.com/apps/news?pid=20601087&sid=a3sQgEZQHX6w&refe... > > > > > > > On Oct 7, 6:41 am, Gaar <[EMAIL PROTECTED]> wrote: > > > > > > > > On Oct 6, 11:54 am, "\"Lone Wolf\"" <[EMAIL PROTECTED]> wrote: > > > > > > > > > Big Companies such as Microsoft and GE have said before the > > > > > > > > bailout > > > > > > > > was approved that they risk insolvency if a credit crunch sets > > > > > > > > in, > > > > > > > > there will be no money to buy back shares. > > > > > > > > WTF? > > > > > > > > You haven't a CLUE do you!?!?!?!?!? > > > > > > > > Do you even understand how much CASH MSFT has on Hand?- Hide > > > > > > > quoted text - > > > > > > > - Show quoted text -- Hide quoted text - > > > > > - Show quoted text -- Hide quoted text - > > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. 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