US fires up as Bernanke ponders stimulus
Comments from the chairman of the US Federal Reserve, Ben Bernanke, that he would consider doing more to stimulate growth in the United States helped lift the local market yesterday.
Comments from the chairman of the US Federal Reserve, Ben Bernanke, that he would consider doing more to stimulate growth in the United States helped lift the local market yesterday.The news raised expectations of a third round of quantitative easing, which would free up billions of dollars for the US financial system, and led to a positive lead from Wall Street. The Dow Jones Industrial Average rose 89.16 points, or 0.7 per cent, to 13,090.The local bourse shot out of the opening gates, with a helping hand from the mechanics of the stockmarket: it was "options expiry day" on the ASX."We think there were some buy-on-open type orders that got filled in pretty quickly," the director of E.L.&C.Baillieu Stockbroking, Richard Morrow, said."Some big investing institutions have mandates that if they buy or sell any stock they have to do it at the start or end of the day, and we think that happened [in the morning]."But after the initial spike, investors retreated and the market eased back.The S&P/ASX200 index closed up 14.8 points, or 0.3 per cent, at 4375.2, while the All Ordinaries index was up 11.1 points, or 0.3 per cent, at 4445.Among the sectors, financials rose 0.5 per cent, industrials gained 0.6 per cent, while materials ended flat. Telcos jumped 1.1 per cent but the gold sub-index lost 1.8 per cent.Television stocks continued to be pummelled yesterday in response to Seven West Media cutting its earnings forecasts.Earlier in the week Seven had said despite expecting an improvement in the advertising market, conditions had not improved. Its earnings forecast for the financial year was reduced to between $460 million and $470 million. The market had been expecting full year earnings of about $520 million. Seven West shares fell 86?, or 22.8 per cent, to $2.91, pulling other media stocks down.Southern Cross shares fell 4.1 per cent, at $1.31, and Prime Media fell 2.7 per cent to 72?. Fairfax Media shares fell 2? to 70?, while Ten Network was steady at 81.5?.Telstra shares rose 4? to $3.51, the highest level since August 2009.Leighton Holdings stocks rose 10? to $20.28, after its Middle East operation - part of a joint venture - was awarded a $US169 million ($163 million) contract for work on a mine in Saudi Arabia.Lend Lease shares were steady, at $7.35, after the property developer said fraudulent activities which prompted a legal investigation into the company's Bovis arm in the US no longer took place.The uranium explorer Marathon Resources rose half a cent to 6.5? after it said it would use a $5 million compensation payment from the South Australian government to investigate new projects.Atlas Iron rose 2? to $2.87 on news that it and rail operator QR National were looking to build a line linking mines in Western Australia's Pilbara region to Port Hedland.National turnover was 2.1 billion shares worth $4.6 billion.