Troubled banking sector triggers panic selling
January 21st, 2009 by Lawrence Grasso
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 7949.09 | -332.13 | -4.0% |
| NASDAQ | 1440.86 | -88.47 | -5.8% |
| S P 500 | 805.22 | -44.9 | -5.3% |
| FTSE 100 | 4091.4 | -17.07 | -0.4% |
| Nikkei 225 | 8065.79 | -191.06 | -2.3% |
| SPI Futures | 3649 | 28 | 0.8% |
| All Ords | 3,425.00 | -105.9 | -3.0% |
| Oil | 38.57 | 4.01 | 11.6% |
| Gold | 855.2 | 15.3 | 1.8% |
| Silver | 11.175 | -0.04 | -0.4% |
| Aluminium | 1351 | -50 | -3.6% |
| Copper | 3275.5 | -45.5 | -1.4% |
| Lead | 1145 | 14 | 1.2% |
| Nickel | 10815 | -65 | -0.6% |
| Tin | 10830 | 25 | 0.2% |
| Zinc | 1197.5 | -8 | -0.7% |
Overnight, old problems weighed heavily on a new administration, with fear over the banking system holding sway over the stock market, despite President Barack Obama's message of confidence. The Dow Jones Industrial Average fell 332 points (4.01%), to 7949, marking its second move below 8000 intraday since November 20. The index was hurt by declines in all its financial components, most notably, Bank of America which was down 26% at the close.
Australian Stocks are set to fall sharply on today, extending the previous day's drop, after a heavy fall on Wall Street where banking and technology stocks took a battering.
ORG
UBS cuts Origin Energy's (ORG) price target to $18.80 from $20.10 and maintains its Buy rating on anticipated ongoing weakness from Contact Energy (CEN), 51%-owned by Origin, as a result of higher gas prices. CEN warned yesterday that a series of unusual events would hurt profits in the current financial year.
BHP (production report for the half year 31 Dec 08)
- 2Q Iron Ore output up 5% year on year.
- 2Q Copper output down 11% year on year to 308,200 tons
- 2Q Aluminium output down 8% year on year 310,000 tons
- Olympic Dam Project activity to be scaled back
- Expects market to remain weak
- Expects longer term fundamentals to remain healthy
- Strongly placed in current market
Look today for buying opportunities in blue chips that you believe have solid fundamentals and strong technical bias. With a long term view today’s stock prices are cheap.
Have a great day!
Lawrence Grasso
Equities and Options Adviser
PS. The ASX has recently announced that the requirements for collateral lodged as margins against option positions will change effective 2nd February 2009.
Only the following will be accepted by E*TRADE and the ACH as collateral from the 2nd February 2009:
• Cash (AUD)
• Equities that are included in the S&P /ASX200 index.
The following will no longer be accepted by the ACH:
• Equities that are not included in the S&P/ASX200 index, unless lodged as specific cover
• Partially paid securities, unless lodged as specific cover
• Any instalment warrants and perpetual income securities
• Non bank promissory notes, certificates of deposit or bills of exchange.
For more information on how this may impact you talk to your Adviser on 1800 000 369.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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