Australian Stock Market Report – Midday August 26, 2014
By Tom Piotrowski, CommSec Market Analyst | August 26, 2014 4:02 PM EST
Sellers return on Tuesday
Local shares were flat footed in early trade on Tuesday, despite solid improvements for US stocks overnight which included the S&P 500 briefly lifting above 2,000 points for the first time. A continuing theme on Tuesday has been the weakness in the resource sector after commodity prices finished the northern hemisphere sessions with mixed fortunes. Investors remain wary of iron ore after prices fell 2% in the last day. More significant however is that prices have fallen below $US90 per tonne. While most sectors were enjoying small gains at first the resolve of buyers faded by lunchtime with the ASX 200 flirting with negative territory.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York July 14, 2014. REUTERS/Lucas Jackson (UNITED STATES - Tags: BUSINESS SOCIETY)
In company news Pacific Brands (PBG) shares rose despite warning 2015 will be another tough year as competition continues to hurt margins. The purveyor of underwear, workwear, homewares, and footwear & outerwear said that underlying profit fell by 29 per cent to $53 million. The group posted a net loss of $224.5 in the year to June from a profit of $73.8 million the previous year. Earnings were marred by the $242 million write-down of goodwill and brand names related to its work wear unit, in addition to other impairment costs and a near $33 million after-tax charge for restructuring. A feature of the result was the news that PBG will sell the work wear unit to Wesfarmers Ltd (WES.AU) for $180 million in cash, which will be used to pay down debt. PBG shares were up more than 1 per cent at lunch time.
Losses for Boart Longyear (BLY) kept building over the morning after the drilling company reported a 1H14 loss and chilled investors with an uninspiring outlook for the remainder of 2014.BLY posted a net loss of $US143 million for the six months to June 30, which follows a loss of $US329.4 million a year ago. Revenue slipped more than 40 per cent to $421.5 million for the half year. The group said it will miss forecasts for revenue and earnings in FY14 which saw the stock down 15 per cent at lunch.
Stem cell researcher Mesoblast (MSB) fell after announcing a 31% in the full 2014 financial year of almost $81 million. Investments in clinical development and manufacturing commercialisation were the factors driving the loss. The company highlighted its strategy to create a broad portfolio and to improve the likelihood of commercial success through strategic partnerships. Earlier in the week Mesoblast appointed Paul Hodgkinson as its new CFO. MSB shares were up more than 3% in a short time ago.
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