Australian Stock Market Report – Midday 5/2/14

Mid Sesssion Report
(12:00 AEST)

A flat open for the ASX 200 has gave way to selling in the early part of trade on Friday. US markets finished on a cautious note as investors ruminate on the outcome of the US jobs report which will be released later this evening local time. Most sectors were in the red, although financials were conspicuous with their decline.

For a second day investors sniffed at a better than expected result from the banking sector. Macquarie Group (MQG) delivered a better that expected result announcing that full year profit rose 49 per cent reflecting improved conditions in equity markets. The investment bank made a net profit of $1.265 billion in the last 12 months compared to $851 million a year ago. MQG declared a final dividend of $1.60 per share, up from the 2013 final distribution of $1.25. The fly in the ointment from the markets perspective was the guidance. The group pointed to a full year net profit which is expected to be broadly in line with 2014, with a better result in the offing if market conditions continue to improve. MQG shares have risen by 4.5 per cent so far this year

Myer (MYR) was another stock to suffer at the hands of an update, although the response was to a weaker result. Total sales in the 13 weeks to April 26 came to $646.5 million, a 0.93 per cent fall on the previous corresponding period and below expectations of $661.8m. MYR blamed refurbishment work at some of its top stores on the decline. Comparable sales, which exclude the impact of the refurbishment work, edged higher by a modest 0.24 per cent increase year-on-year. MYR said fourth quarter sales would receive a boost from the re-opening of its Adelaide CBD store and it's Indooroopilly Store in Brisbane. Additionally, the flagship Melbourne store would benefit from the opening of 7,000 square metres of new space as part of the adjacent Emporium development. MYR shares were down 4.4% in late morning trade.

Gold futures declined on signs of a strengthening US economy following data which showed that consumer spending and manufacturing expanded faster than expected, boosting expectations the Federal Reserve will continue to further cut stimulus measures. As a result gold miners were given the cold shoulder once again. Newcrest Mining (NCM) was at $10.15, a loss of 14 cents or 1.4 per cent