Market wrap: Australian shares face a muted start after a night of consolidation on Wall Street and a mixed session for commodity prices.
The September SPI futures contract ended the night session 7 points or 0.2% weaker at 4518 as US shares tallied mild losses a day after the Dow's best session of the year.
The major US indexes struggled for traction as optimism over solid earnings and merger action was offset by the deadlock over the federal debt ceiling. The benchmark S&P 500 was ahead mid-afternoon but eased to a 0.09% loss in the final minutes of trade. The Dow lost 16 points or 0.12% and the Nasdaq 0.43%.
"We're not completely out of the woods as far as the debt-ceiling issue, and we're not completely out of the woods as far as Europe is concerned," the chief market strategist at Banyan Partners told MarketWatch. "When you're up over 200 points in a single day [Tuesday], it's not out of the realm of conceptual thinking that people are taking profit on strong earnings."
Financial stocks led the sector advances. Shares in Apple rallied 2.7% following its earnings report, delivered yesterday morning, Australian time.
Optimism over Tuesday's promising housing news was tempered by a dip in sales of existing homes to a seven-month low last month. Sales for a third straight month, down 0.8%.
Oil overcame a late wobble following bearish US inventory news to close higher. Light sweet crude for August delivery was recently ahead 49 cents or 0.5% at US $98.35 a barrel.
Gold also overcame early wobbles to trade little changed a day after Tuesday's sharp sell-off. Gold for August delivery was recently off 10 cents or 0.1% at US $1,601 an ounce after earlier falling as low as $1,581.
Copper eased for the first night in four as profit-takers capitalised on recent strength. In London, copper lost 0.85%, aluminium 0.65%, lead 2.3%, nickel 0.5% and zinc 1.4%. Tin gained 0.9%. US copper was recently off 0.7%.
The major European markets played catch-up following Tuesday's big rises in the US. Britain's FTSE added 1.1%, Germany's DAX 0.4% and France's CAC 1.61%.
TRADING THEMES TODAY
CONSOLIDATING THE GAINS: That was a bit of a "nothing" night on Wall Street, with no clear direction and no real impetus to push the market one way or the other. The banks were strong in the US and gold/silver miners pared Tuesday's losses. Our market may benefit this morning from further gains in the big miners in US trade: BHP +1.4%, Rio Tinto +1%, Alumina +2.45%. Commodities were mixed - oil up, base metals mostly down, gold flat. Our market seems likely to tread water until the 12.30 pm AEST release of Chinese manufacturing numbers (see below).
CHINESE MANUFACTURING: The Chinese central government has been trying to steer a "soft landing" for its runaway economy by raising interest rates and lending capital reserves. The success of its campaign has been evidenced in a steady decline in the HSBC flash manufacturing purchasing managers' index recently until last month's reading hovered at 50.1 - just the right side of expansion. The latest reading is due at 12.30 pm AEST.
AFTER-MARKET REPORTS: Two more big names have delivered earnings since regular trade on Wall Street closed this morning. The reaction has been mixed, with shares in Intel - the more significant of the two - off 1.5% and Amex ahead +0.2%. No boost for our market today from that quarter. It will be worth watching US futures if Intel keeps sliding.
ECONOMIC NEWS: The Japanese trade balance is due at 9.50 am AEST. Quarterly Australian business confidence figures are due at 11.30 am. Chinese manufacturing numbers are due at 12.30 pm. A busy night in the US includes: weekly unemployment claims, the Philly Fed manufacturing index, testimony from Fed chairman Bernanke on the implementation of the Dodd-Frank Act, the monthly leading index, house price index and natural gas storage.
