The market is down 34 – the SFE Futures predicted a 27 point fall this morning.

The Dow Jones closed down 65 – It moved in a relatively narrow 81 point range and finished lower for the second consecutive session on the back of JP Morgan cutting their recommendation on the four biggest financial stocks. Goldman Sachs Group (-4%), Morgan Stanley (-4.5%), Merrill Lynch (-3.5%) and Lehman Brothers (-2.5%) were all downgraded, with the JP Morgan analyst saying they were likely to make further write-downs on assets affected by subprime losses. The market isn’t expecting financials to recover any time soon, according to Thomson Financial, consensus earnings forecast for financials have fallen from +7% to negative 31% since October 1. According to the Fed futures, there is a 48% chance the Fed will cut interest rates by 25bp to 4.25% when it next meets on December 11th (next week). The NASDAQ lost 0.7%.

The RBA have left interest rates unchanged at 6.75%

Resources slightly lower today… BHP down 13c to 4297c and RIO up 100c to 14410c. Metals mostly down overnight, Nickel down 4.3%, Zinc down 2.5% and Copper 1.6%. Aluminium up 0.3%. Zinifex up a healthy 40c to 1502c on rumours of a bid from Xstrata. Oil price down 98c to $88.31 after an OPEC delegate said the possibility of a production increase will be discussed in tomorrows meeting. Woodside down 25c to 4745c. Gold up $12.90. Were’s say BUY Newcrest , NCM up 23c today to 3329c.

  • Coca Cola Amatil (CCL) down 13c today to 999c despite providing a positive trading update this morning. They announced a $70m share buyback and said it is on track for 10-11% operating profit growth, compared to high single digit EBIT growth previously (the market was expecting an upgrade already).
  • Nufarm have held their AGM – They told shareholders that 1H profit is expected to be up by around 6.5% and that it expects to meet its forecast for net profit of around $145m for the FY. This could well be irrelevant as they are awaiting a takeover offer of up to $3bn from China National Chemical Corp. ChemChina and two private equities group offered 1725c share and a 30c dividend last month. They have exclusive access to Nufarm’s books until December 10. NUF down 3c to 1672c.
  • Leighton Holdings (LEI) flying this morning – up 3.1% to 6126c after announcing its 45% owned Al Habtoor Engineering has been awarded US$650m worth of new work in the UAE. The contract will involve the construction of the new JAFZA convention centre in Dubai and two hotels for Aldar and Yas Island in Abu Dhabi. We mentioned yesterday the write up by ABN AMRO research on the Middle Eastern region and how they believe it is set to grow exponentially. From yesterday’s email, “They also say the oil price is sustainable, Sovereign Funds are growing exponentially and will impact on global asset classes and the region is having a construction boom (which might help explain why Leighton Holdings is up 200% this year).”
  • Photon Group (PGA) announced they have acquired Findology, an internet advertising business in the US at a cost of around $22.6m. It will represent 18% of PGA’s EBITDA and Were’s estimates it was bought on a EV/EBITDA multiple of 5x to 6x. They have a HOLD recommendation on PGA, who is down 5c today to 670c.
  • Early Learning Services (ELY) listed this morning on the ASX. It opened at 99c against its 100c issue price. It raised $34m and has a market capitalization of $44m. ELY has 17 child care centres in NSW and QLD and plans to buy 32 more in the next couple of months to become the second largest child care company in Australia. ABS Learning (ABS) is Ely’ s main competitor and has a market cap of $2.5bn, almost 57 times bigger. The way Eddie Groves is going with acquisitions, it might just well get taken over. It expects to make a profit of $4.1m in 2008, giving it a PER of 10.7x IPO price.
  • Mineral Deposits (MDL) is in a trading halt.
  • Albidon (ALB) up 10% on a 50% inferred uranium resource estimate upgrade in Zambia.
  • Api Fund (APR) goes ex-dividend today.

We have an article in the MARCUS TODAY newsletter today about the market being a Rock in a Sock. If you didn’t hold the Magnificent Twenty (the twenty stocks that contributed the most points to the ASX 200 index) this year….then for you the market is down 0.4% year to date….and to think you thought it was a good year.

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