Australian stocks are back in the red in early trade on Thursday, despite gains made on blue chip stocks in New York overnight. The US Dow Jones Index closed in positive territory after President Obama nominated current US Federal Reserve Vice-Chair Janet Yellen to succeed Ben Bernanke as Fed Chief when his term ends in January 2014. If endorsed by the Senate, Yellen will become the first female Federal Reserve Chair in the bank's 100 year history.
Traders work on the floor of the New York Stock Exchange, Aug. 8, 2011.
Yellen is seen as dovish, and likely to continue with Bernanke's current stimulus program, rather than suddenly halt which is seen as a positive sign for investor sentiment.
Locally however, the sellers have moved in again, particularly on energy and mining stocks due to weaker commodity prices overnight.
In company news, the Bank of Queensland (BOQ) has released its full year cash profit today. The bank reported after cash earnings of $250.9 million in the year to August and increased its final dividend by 6c to 58c per share. The result is a vast improvement on last year's cash profit of $31 million, and comes as BOQ managed to heavily reduce its bad debts.BOQ shares were up 6.4% to $11.12
Whitehaven Coal (WHC) has contracted Leighton Holdings (LEI) to build a rail loop for its $766 million Maules Creek project in NSW. The mine, in the Gunnedah basin in the state´s north, is slated to begin production in the first quarter of calendar 2015, providing 10.5 million tonnes of saleable thermal and coking coal. WHC shares are down 2 per cent in early trade to $1.79 while LEI is firmer by 1.4 per cent to $17.35.
Positive employment data were the feature of the morning session. Employment rose by 9,100 in September after falling by a revised 10,200 jobs in August (previously reported as a 10,800 loss in jobs). Full-time jobs rose by 5,000 in September and part-time jobs rose by 4,100. Jobless rate down. The unemployment rate fell from 5.8 per cent to 5.6 per cent in September. The participation rate fell from 65.0 per cent to 64.9 per cent. As a result of the jobs data sellers retreated and the Aussie dollar firmed. The figures are another indication that slowly but surely the non- mining economy is picking up where the mining economy left off.
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