daytrading april 5 pre-market

Morning traders.

Market wrap:

Wall Street's second-worst session of the year and a slump in commodities have Australian shares pointed lower this morning.

The June SPI 200 futures contract ended the night session 37 points or 0.9% weaker at 4312 as major European markets plunged more than 2% following a tepid Spanish bond auction.

A night of mixed news saw the S&P 500 record its biggest decline in a month, falling 1.02% as key European bond yields hit three-month highs and the US services sector moderated its expansion. The Dow fell 125 points or 0.95% and the Nasdaq plummeted 1.46% - its largest fall of the year - after SanDisk cut its sales outlook.

European markets tumbled as slack demand at a Spanish bond auction overnight following ugly unemployment and deficit data this week revived fears that Europe's debt crisis is far from over. Spain's five-year bond yields crept to their highest level since January and Italian 10-year yields inched higher. Britain's FTSE skidded 2.3%, Germany's DAX 2.84% and France's CAC 2.74%.

US economic news was mixed. Growth in the services sector moderated last month but from a very strong pace. The Institute for Supply Management's services-sector index eased to 56 from 57.3 in February. A private payrolls report seen as a good indicator for tomorrow night's monthly government jobs data showed solid gains last month roughly in line with expectations. Private-sector employment increased 209,000 in March, a slight decline from a revised 230,000 in February.

"It doesn't matter what the news is today, I don't think it'll stem a decline," the managing director of HighTower's VWG Wealth Management in the US told Bloomberg. "The market is showing signs that it's ready for a little consolidation. You could make a case that the market is looking for an excuse to pause and digest some of its gains."

Resource stocks were among the sectors hit hardest as the US dollar continued to find strength in the Federal Reserve's reluctance to pursue further stimulus buying, sapping demand for alternative assets. In US trade, BHP fell 2.55%, Rio Tinto 3.6% and Alumina 3.5%.

Precious metals dropped to their lowest levels since January. Gold for June delivery was lately down $50.20 or 3% at US$1,621.80 an ounce after recording its lowest settlement since January 9. May silver slipped $1.91 or 5.7% to US$31.36 an ounce. Platinum and palladium both fell around 3.5%.

Copper led a retreat in industrial metals. In London, copper lost 2.9%, aluminium 1.6%, lead 3.7%, nickel 2.6%, tin 1.85% and zinc 2.1%. US copper was recently down 3.2%.

"When I look at gold, copper, silver and platinum, it's definitely an over-reaction," a partner at LOGIC Advisors in the US told Reuters. "It's a general money flow that crossed market sectors, and certainly metals were a part of that. The risk-appetite restaurant was closed today."

US crude oil had the additional pressure of an increase in the US weekly inventories report five times higher than predicted. Crude stockpiles rose by nine million barrels last week, against expectations of an increase of 1.9 million barrels. Crude for May delivery was recently down $1.98 or 1.9% at US$102.03 a barrel.

TRADING THEMES TODAY

CAUTION LIKELY TO PREVAIL: Well, you couldn't ask for a much worse set of leads going into a long weekend. Risk was well truly "off" last night and that leaves local traders with tough decisions to make today ahead of a two-day Easter shutdown on the ASX while Wall Street takes just one (Good Friday). A lot can happen in two nights of US trade. Or not. To hold or not to hold? Many traders will opt for the latter, which is likely to add to selling pressure late in the day. I normally like to buy weakness but I'll exercise more caution than usual this session. There was no hiding place in the US overnight, but defensive sectors such as utilities and consumer stocks suffered less damage.

ECONOMIC NEWS: No significant domestic news scheduled today. Europe has manufacturing and industrial production data due tonight. The US has weekly unemployment claims and Challenger job cuts.

Good luck to all.