daytrades july 26 pre-market, page-8

Good Morning,

The Australian stock market is expected to open higher after gains on Wall Street on Friday.

When the Sydney Futures Exchange last traded on Saturday morning, the September share price index contract was up 40 points at 4476 points, on volume of 3136 contracts. On Friday, the major indices each rose almost 2 per cent.

What you need to know

The SPI was 40 points higher at 4476
The Australian dollar was buying 89.6 US cents
In the US, the S&P500 rose 8.99 points to 1102.66
In Europe, the FTSE 100 fell 1.19 points to 5312.62
Gold fell $US7.80 an ounce to $US1187.80
Oil fell 32 US cents a barrel to $US78.98
Stocks to watch: possible market movers
Wall Street week ahead: what's in store
Australian diary: calendar of the week's events

What's out today

In economics news, the Australian Bureau of Statistics releases producer price indices for June.

In companies news, GUD Holdings and Australian Foundation Investment Company release full-year results.

MMG will release its June quarter production report.

Wesfarmers releases June quarter and full-year sales results.

Australia Post chairman David Mortimer and chief executive Ahmed Fahour address an Australia Israel Chamber of Commerce luncheon.

City Index head of Asia Pacific dealing Michael McCarthy said the results of the European stress test were an "official tick" that were likely to lift the banking sector - and the overall market.

Although the positive sentiment is expected the buoy the S&P/ASX200 Index, Mr McCarthy noted that in recent days Australian shares had gained on positive US and European news only to fall away later in the day.

That indicates to me the day-traders are quite positive and active but the longer term investors, big investors and funds are possibly on the sidelines, he said.

It suggest they are waiting for the outcome of the federal election and the end of US reporting season before making any major moves in the local market, Mr McCarthy said.

In the news this morning

Corporate advisers Korda Mentha have been called in to agribusiness group Willmott after investors shunned its latest managed investment scheme.

Michael Pascoe says that on the question of population, Mongoose politics prevails a pair of glorified ferrets dodging and weaving around the cobra of public opinion.
It may not have the deep pockets of the powerful mining lobby, but small business may yet have a big say in who leads the country.

Overseas and BP chief executive Tony Hayward is in departure talks with the oil giant's board in the wake of the devastating oil spill off the US coast.

Plus, Adele Ferguson on Bendigo and Adelaide Bank, Craig James on population growth and Barry FitzGerald's Garimpeiro column on the world of mining.

Offshore

US stocks extended gains on Friday in cautious trading as Wall Street digested results of stress tests on European banks as well as quarterly earnings of American companies.
The Dow Jones Industrial Average climbed 102.32 points, or 0.99 per cent, to settle at 10,424.62 after a gain of nearly two per cent, or 200 points, a day earlier on better-than-expected earnings of key US companies.

The tech-rich Nasdaq composite index rose 23.58 points, or 1.05 per cent, to 2269.47 and the broader S&P 500 index added 8.99 points, or 0.82 per cent, at 1102.66.

The market reacted cautiously to a much-awaited report after stress tests on 91 European banks.

Seven banks failed the assessment, according to the Committee of European Banking Supervisors.

On the positive side, the market reacted favorably to better than expected corporate earnings and a 20 per cent increase in conglomerate General Electric's quarterly dividend, analysts said.

European stocks closed narrowly mixed in choppy trade on Friday ahead of the release of banks' stress tests, designed to show whether the banking system is strong enough to withstand fresh shocks.

Dealers said sentiment got a boost from much better-than-expected British and German economic data but investors were reluctant to take up the lead until the results of the bank stress tests were known.

Banks provide the credit that drives business and any suggestion that they were still struggling in the fallout from the global financial crisis would badly hit confidence in them and the economic recovery, they said.

London's FTSE 100 index of leading shares was virtually unchanged at 5312.62 points, falling 1.19 points.

The German DAX was up 24.19 points, or 0.39 per cent, at 6166.34 points.

The French CAC 40 index added 6.48 points, or 0.18 per cent, to 3607.05 points.

How we fared Friday

The share market closed higher following a surge on Wall Street driven by strong US corporate earnings.

The benchmark S&P/ASX200 index was up 83.7 points, or 1.91 per cent, at 4458.4 points, while the broader All Ordinaries index added 80.3 points, or 1.83 per cent, to 4475.1 points.

Commodities

Oil prices dipped on Friday as worries eased about potential damage to Gulf Coast oil operations from Tropical Storm Bonnie.

Benchmark crude fell 32 US cents to settle at $US78.98 a barrel on the New York Mercantile Exchange. Oil picked up about $US2 a barrel since Monday.

The storm, expected to hit the Gulf of Mexico on the weekend, has prompted some companies to evacuate crews from rigs. Dozens of ships that were working on a permanent fix for BP's damaged oil well already have been ordered to shore.

Brent crude lost 37 US cents to settle at $US77.45 a barrel on the ICE futures exchange.

September gold fell $US7.80 to settle at $US1187.80 a fine ounce on the Comex division of the New York Mercantile Exchange.

September silver fell 1.9 US cents to settle at $18.101 per ounce.

Copper for September delivery settled 2.05 US cents higher at $US3.185 per pound.
http://www.theage.com.au/business/markets/stocks-set-to-rise-after-offshore-gains-20100726-10qwt.html