The overnight news wasn't as bad as many were fearing - in all...

The overnight news wasn't as bad as many were fearing - in all the reporting is going well with many below forecasts, but not as low as many expected, which oddly means a bad thing is also a good thing - but that's market logic for you - in the end a lot of big players aren't running to the hills right now, so a bit more attention can be given to our beloved resources - as this morning's bull-run with CFR is proving...

Dow down 29. Up 63 at best. Down 73 at worst.

SFE Futures down 32.

Dow Jones down 0.25%
S&P500 down 0.05%.
Nasdaq down 0.14%.


Better-than-expected earnings results from Bank of America.

Financials initially up 2.8% but closed only 0.39% up – profit taking after last weeks mammoth 11.4% hike.

Techs down 1.76% on poor results from Texas and Apple.

Oil price up for 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 – so far four production platforms and one rig have been closed. One agency forecasts that 91% of Oil production and 88% of Natural Gas production may experience short term shut-ins with not long term disruption.

Energy sector up 3%. Iran has also been given two weeks to pull back their nuclear program or suffer further sanctions.

Resources outperform– BHP and RIO both up more than 4% in the US. Materials sector up 2.07%.

The SEC rules against short selling 19 financial stocks for the next 30 days came into effect with a comment from the SEC that “We cannot have a segregated market where only the large and connected get protected by the SEC” – in other words the rules may be extended to other sectors of the market with lobbyists trying to have it extended at least to all the major banks.

Steel stocks well up in the US overnight.
Consumer discretionary down 1.78%.
VIX Volatility index down 4.16% to 23.05.
Oil price up $2.49 to $131.43.
Bonds up with the 10 year yield down to 4.0417%.
Gold price up $5.70to $963.70.

Companies

Bank of America posted a 2Q earnings drop of 43% to 72c per share – better than the 53c expected – expected write-downs were much less at only $1.2bn. CEO will recommend that the quarterly dividend remains at 64c per share. Up 3.89%.

Yahoo! have appointed Icahn to the board and will choose 2 other members from Icahn’s preferred list of nine.
Europe’s Roche Holdings have offered to buy Genentech – Genentech up 12%.

Schering Plough down 11.6% and Merck down 6.24% and both down another 3.7% and 6.6% after hours on the news that an SEAS study, a major European trial in patients with heart valve disease, showed that the joint-venture cholesterol drug, Vytorin, does not reduce the chance for surgery or decrease the worsening of the disease. The drug is a joint development between Schering Plough and Merck.

After Hours:

The Dow Futures are currently down 112 on the back of a series of really crappy after hours results.

American Express posted 2Q profit down 37% - down 11.12% in after hours trading. Shares down 3.06% in normal trade.

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 (they are going to make sales of $7.8bn instead of $8.2bn) – down 10.27% after hours. The stock is down 17% this year against a market down 14%. Up 0.69% in normal trade.

Texas Instruments posted profits 3.6% down – first decline in four quarters – fell 12.34% in after hours trading.
Down 1.04% in normal trade.

SandDisk Corp down 12% after hours post results.

CapitalOne down 5.44% in after hours trade on results. The credit card company set aside $1.9bn in the 4Q for losses on loans.

Economics

June leading indicators down 0.1% - in-line and didn’t make much of an impact on trading.

Commodities and Futures:

The SFE Futures suggest a 32 point fall in the market.
Both BHP and RIO up in ADR form overnight, 4.12% and 4.86% respectively.

Metals all up overnight – Zinc up 2.39%, Nickel up 0.72% and Copper 0.51%. Aluminium up 0.37%.

Oil price up $2.49 to $131.43 after Tropical Storm Dolly made its way into the Gulf of Mexico, increasing concerns of disruptions to U.S. offshore oil and gas production.

Gold up $5.70 to $963.70

Bonds up with the 10 year yield down to 4.05% from 4.09%.

US Diary tonight:-

Economics:

May house price index

Results:

Biogen Idec, Caterpillar, CME Group, DuPont, Halliburton, LM Ericsson, Supervalu, UAL Corp, UnitedHealth, UPS, Wachovia, Broadcom, Norfolk Southern, VMware, Washington Mutual, Yahoo!

Fed Speak:

Philadelphia Fed President Plosser speaking on the U.S. economy

AUSTRALIAN MARKET

On the diary

Oil Search 2Q Production Numbers
Sino Gold 2Q Production Figures
Oxiana 2Q Production Numbers
Genworth Financial Mortgage Trends Report 2008
Penny Won addresses Australian Business Economists lunch on Emissions Trading Scheme Green Paper
Chemgenex Pharma EGM
Alchemy Resources AGM

Patersons review on Nickel Sulphide stocks says:

Whole sector cheap
Floor of $25,000 a ton broken 2 months ago and has collapsed some stocks.
Nickel Laterite costs have jumped favouring sulphide miners – simpler and cheaper to develop, lower capex.
MBN, WSA, ALB most likely takeover targets.
PAN, MCR, IGO cashed up and debt free – share buybacks possible.
PAN the standout cheap stock. Running different nickel price scenarios – PAN preferred.
PAN now 241c – target price 549c (+127%)
MCR now 217c – target price 360c (+65%)
IGO now 338c – target price 490c (+45%)
ALB now 276c – target price 460c (+65%)
MBN now 495c – target price 830c (+67%) – more financing details out soon.
WSA now 780c – target price 1080c (+38%)

New listing

Stock : Manas Resources Limited (Gold exploration)
Code : MSR
Opening : 1pm EST (11am WST)
Issue price : 20 cents

Good luck to Manas, but especially better luck to CFR...