Dow Up 42pts Led By Financial Shares, Gold Falls

January 28th, 2010  by Katy Loi

Closing Data

	Current	Change	%
Dow Jones	10,236.16	41.87	0.4%
NASDAQ	2,221.41	17.68	0.8%
S P 500	1,097.50	5.33	0.5%
FTSE 100	5,217.47	-59.38	-1.1%
Nikkei 225	10,252.08	-73.2	-0.7%
ASX 200	4,645.00	-73.2	-1.6%
COMEX Gold - Dec 09	1,084.50	-13.8	-1.3%
COMEX Silver - Sep 09	16.44	-0.42	-2.5%
COMEX Copper - Sep 09	322.25	-11.7	-3.5%
WTI Spot	74.32	-0.39	-0.5%
AUD-USD	0.8948	-0.0037	-0.4%
Aluminium	2,189.50	-28	-1.3%
Copper	7,306.00	-103	-1.4%
Lead	2,165.50	-69.5	-3.1%
Nickel	18,295.00	-80	-0.4%
Tin	17,750.00	0	0.0%
Zinc	2,307.50	-16	-0.7%

US Stocks finished up around 41 points as the Federal reserve pledged to keep interest rates low.  The rally was led by a 2.4 percent gain in financial shares.  Gold was down 11 dollars and is holding at the 1100 support level at $1088 an ounce.  Option trade and contract rollover ahead of February's first notice day Friday made for choppy trade. Support largely held at February's 100-day moving average at $1,086. Concern lies in economic growth slowing as the Federal Reserve and the European Central Bank curb stimulus measures.  Economists predict central banks in China, India, Brazil and Australia will push up borrowing costs.

The Fed today confirmed a plan to end a program that bought mortgage-backed securities in March, while maintaining its pledge to leave interest rates near a record low for an extended period. Asian markets have also generally weakened, although not quite as far because of the smaller influence of mining stocks.   U.S. President Barack Obama’s plan to impose new rules on bank size and risk dominated talk among bankers on the first day of the World Economic Forum in Davos, Switzerland. Executives said big banks are essential and rules should be coordinated globally.
 
In company news, CSR Ltd has again rejected China’s Bright Food Group’s offer to acquire its sugar and renewable energy business for $1.5 billion. Woolworths Ltd has reported a 4.2% increase in sales for the half year to $27.2 billion. There are reports that BHP and Rio Tinto proposed Western Australian iron ore joint venture could face delays after news that the European Union said its review would focus on seaborne iron ore markets instead of total global production. On Monday, the watchdog confirmed that it had begun its antitrust investigation into the proposed joint venture to merge both company’s operations in the Pilbara of Western Australia. According to a report in the Australian an EU spokesperson says the commission will, in particular, examine the effects of the proposed joint venture on the worldwide market for iron ore transported by sea. The paper says BHP and Rio’s combined production in the Pilbara last year amounted to 36% of the seaborne iron ore market. BHP and Rio have agreed to market their share of the joint venture separately.

Today in our market, we are set to open fairly flat with SPI futures pointing down only 6 points. Support at 4600 has been tested four times over the last 4 months, so looks to hold above this level.  The late rally in the futures market should continue on open to see 4675, with the next resistance level at 4700. With January equity options expiration today, we look to continue selling call options for February to generate income as the market takes time to price in offshore news. 

With reporting season starting, it may be prudent to enter the market at discounted levels.  Dividends coming up in February for WDC, RIO and  BHP could present good opportunities for income for the month. For courses of action for expiry today, please discuss with your Freeman Fox Adviser.

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

< Return to Market Fox home