Australian market set to open higher

THE Australian market has opened slightly higher despite falls in resources stocks.

IG market strategist Stan Shamu said commodity prices continued to fall overnight and he expected resources stocks to drop during the day, especially gold.

"Commodities remained under pressure overnight with notable weakness in gold," he said.

"We expect gold names to struggle today, led by Newcrest Mining which is headed for its lowest level since June 2006 of $15.64."

Newcrest shares opened 81 cents, or 5.11 per cent, lower at $15.05.

The mining giants all dropped on opening.

BHP Billiton lost 11 cents to $33.92, Rio Tinto dived 53 cents to $55.24 and Fortescue tumbled six cents to $3.53.

The four major banks all opened in positive territory.

Commonwealth Bank surged 79 cents to $73.44, National Australia Bank jumped 14 cents to $33.21, ANZ added eight cents to $30.06 and Westpac gained five cents to $31.72.

Graincorp shares fell 0.5 cents to $12.745 after it announced its first half profit had fallen by 34 per cent due to costs from its purchase of several food companies.

Australia's largest grain handler is also currently working with food giant Archer Daniels Midland to complete a $3 billion takeover.

In economic news on Thursday, the Australian Bureau of Statistics is due to release March international merchandise imports data.

KEY FACTS

* At 1016 AEST on Thursday, the benchmark S&P/ASX200 index was up 14.3 points, or 0.28 per cent, at 5,206, while the broader All Ordinaries index was up 13.5 points, or 0.26 per cent, at 5,186.8.

On the ASX 24, the June share price index futures contract was up eight points at 5,209, with 9,973 contracts traded.

* National turnover was 226.93 million securities worth $774.71 million.

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Fire rips through luxury hotel

A FIRE at a luxury hotel on Phillip Island has caused more than $1 million worth of damage.

The second floor of Castle Villa by the Sea on Steele St in Cowes was destroyed after a fire broke out around 7pm last night.

Firefighters battled the blaze for six hours with 13 trucks on scene.

No-one was hurt in the fire and arson investigators will return to the scene this morning.

The hotel commands up to $675 per room a night.

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France's Hollande anticipates zero growth

France has slipped back into recession, with the president predicting zero growth for 2013. Source: AAP

FRENCH President Francois Hollande says he now anticipates "zero growth" for 2013, after the eurozone's second largest economy slipped back into recession.

"It is likely that there will be zero growth in 2013," Hollande told a reporters in Brussels, shortly after his finance minister in Paris tipped 0.1 per cent growth for 2013.

The Socialist leader maintained that France had come through the worst after sliding into recession in the first three months of the year.

The eurozone as a whole, according to new figures released on Wednesday by the European Union, posted its sixth consecutive quarter of economic contraction - leading economists to label it the "weakest link" in the sluggish global economy.

Hollande said the confirmation of recession for his country was "the announcement of something that had already happened, not something about to take place".

"It is my view that we are past the worst," he said after talks with European Commission head Jose Manuel Barroso focused on a summit of EU leaders back in Brussels in seven days' time.

However, Hollande refused to entertain notions that France - the eurozone's second biggest economy, but on an increasingly divergent path from leading light Germany - was dragging Europe down.

"Is France a separate case?" Hollande asked rhetorically, after the 17-state eurozone posted a 0.2 per cent contraction in economic output between January and March of this year, and a 1.0 per cent slide year-on-year.

Hollande said the recession across the eurozone - home to 340 million citizens and the biggest tariff-free market outside the United States - could be explained by "the accumulation of austerity politics".

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Virgin share tumble after profit warning

VIRGIN Australia's shares have tumbled following a profit warning issued by the airline after the market closed on Wednesday.

Virgin Australia said its profits would be lower than those for 2011/12.

"The adverse impact to revenue from the introduction of the Sabre (reservation) system in the third quarter is not likely to be recovered by the end of FY13, given the slower than anticipated improvement in trading and economic conditions," the airline said in its trading update.

In February, Virgin Australia reported a first half profit slump of 56 per cent, but said it expected to improve its underlying performance despite challenging economic conditions.

The airline made a net profit of $23 million in the six months to December 31, down from $51.8 million in the previous corresponding period.

At 1105 AEST, its shares were down 3.5 cents, or 7.61 per cent, to 42.5 cents.

Meanwhile, it expects to complete its 60 per cent purchase of budget carrier Tiger Airways in July.

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$A mildly higher after weak US data

THE Australian dollar is slightly higher as the greenback's week-long rally stalled following the release weak New York State manufacturing data.

At 0700 AEST on Thursday, the local unit was trading at 98.99 US cents, up from 98.72 cents on Wednesday.

During the overnight session, the currency peaked at 99.01 US cents, its highest level since Monday.

BK Asset Management managing director Kathy Lien said the fall in New York state manufacturing activity in May dampened hopes that the US Federal Reserve would end its program of bond purchases aimed at boosting the American economy.

Over the past week, the US dollar rallied against all the major currencies on hopes that that program would end soon.

"The reason why you've seen a mild amount of strength in the Australian dollar is because we've had a weaker US economic report," Ms Lien said from New York.

"That raised some concerns whether the improvements in April economic data will be sustained into May and whether all this talk of the Fed tapering asset purchases is justified.

"So, you saw a little bit of a sell-off in the US dollar and that's driven the Aussie higher. But, it is relatively modest."

Ms Lien said investors would get further indications about the state of the US economy during the offshore session on Thursday night.

US housing starts for April and the Philadelphia Federal Reserve manufacturing survey for the same month will be released.

Ms Lien said she expects the Australian dollar to trade in a range between 98.60 and 99.25 cents on Thursday.

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US stocks hit fresh record highs

US stocks closed at new all-time highs following a choppy day of trading on Wednesday as investors shrugged off more economic gloom from the eurozone.

The Dow Jones Industrial Average rose 60.44 (0.40 per cent) to 15,275.69, setting a new record closing high for the second day in a row.

The broad-based S&P 500 added 8.44 (0.51 per cent) at 1658.78, its fourth straight day of record closes, while the Nasdaq Composite Index increased 9.01 (0.26 per cent) to 3471.62.

All three indices rose through the early afternoon, then retreated somewhat before staging a late rally.

Official European Union figures showed the eurozone economy shrank 0.2 per cent between January and March, the sixth consecutive quarterly contraction in the longest recession since the single currency bloc was established in 1999.

On the positive side on this side of the Atlantic, builder confidence in the US market for newly built, single-family homes rose three points to 44, according to a reading on the National Association of Home Builders/Wells Fargo Housing Market Index.

Art Hogan of Lazard Capital Markets said the market was reacting to a "steadily improving housing sector" as shown by the NAHB data.

"It's been the same theme for most of this year," said Michael James, managing director of equity trading at Wedbush Morgan Securities. "Any pullback in the market is a buying opportunity."

James said the market was cheered by strong gains in financial equities, such as JPMorgan Chase, which rose 1.7 per cent.

Apple dropped 3.4 per cent following reports that a number of leading hedge funds exited or reduced their holdings in the company in the first quarter. Among those to trim holdings were David Tepper's Appaloosa Management, which reduced its stake to 540,00 shares from almost 913,000 shares.

Google put on 3.3 per cent after unveiling a music service for smartphones and tablets powered by its Android software. The technology giant's Google Play All Access launched in the US with a monthly subscription fee of $10.

The yield on the 10-year US Treasury slipped to 1.94 per cent from 1.95 per cent late Tuesday, while the 30-year held steady at 3.16 per cent, the same level as Tuesday. Bond prices move inversely to yields.

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The most iconic Aussie road trip?

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• Famous Aussie photographer embarks on road trip
• Driving from Bondi to the Gold Coast, will be filming
• Says Aussies need to appreciate our own country
• In pictures: Stunning Aquabumps shots

FAMOUS surf photographer Aquabumps has urged Aussies to appreciate what's in their own backyard as he leaves Sydney today on an iconic road trip.

Eugene Tan, who started Aquabumps in 1999, will drive from Bondi to the Gold Coast for the Land Rover Quicksilver Pro event at Snapper Rocks, a 12-day event which attracts more than 80,000 locals and viewers worldwide. He'll stop along the way to capture iconic surf moments.

"It's a pretty iconic drive to Snapper Rocks," Tan said. "The scenery is amazing, it's a pilgrimage for surfers."

While there's no set itinerary, Tan, who will be travelling with a group of up-and-coming surfers, will stop at various beaches along the way including at Seals Rocks, Foster, Crescent Head, Port Macquarie and Byron Bay, ending up at the Gold Coast.

Eugene Tan is set to leave for a great Australian road trip. Picture: Ken Butti

"Australia is so beautiful, I love the diversity from Sydney to the Gold Coast, there's so much plant life and a huge coastline," he said.

"You can find peace and quiet easily and the colour is great. We have beautiful headlands, I like to put them in the backdrop of my photos to give them some perspective."

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan

Tan said one of the highlights of the trip will by Byron Bay.

"I'm pretty excited about going to Byron, it's pretty spectacular, the whole vibe, the warmth, warm water, long waves."

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

He'll be filming his journey and will post footage and photographs onto the Land Rover Australia Facebook page along the way. There will also be a competition for surfing enthusiasts to showcase their own photographic talents.

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

Tan urged Australians to follow his lead and travel closer to home instead of going off overseas.

"The Aussie dollar is so high, domestic travel is dwindling, so you've got to remember what's in your own backyard."

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

Tan, who quit his day job at 30, has watched and captured the sunrise every day for the past 14 years and has built an extremely successful business out of it – his Facebook page alone has more than 74,000 likes.

"I'm addicted to shooting sunrises, the early light is the best in Sydney. I've been getting up to shoot the sunrise every day for 14 years. You never master it, it's like golf."

In pictures: Stunning Aquabumps shots

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

Surf photography by Aquabumps - Eugene Tan. Picture: Eugene Tan Source: Supplied

 
 

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IMF releases first Cyprus bailout funds

The International Monetary Fund has approved a $A1.35 billion bailout loan for Cyprus. Source: AAP

THE International Monetary Fund has approved a $US1.33 billion ($A1.35 billion) bailout loan for Cyprus and released the first $US110.7 million to the Cypriot government.

The loan is part of a combined $US13 billion emergency financing deal set by the IMF and the European Stability Mechanism that aims to support the government as it seeks to stabilise the ravaged Cypriot banking sector.

"It is intended to stabilise the country's financial system, achieve fiscal sustainability, and support the recovery of economic activity to preserve the welfare of the population," the IMF said in a statement.

The announcement came two days after the ESM, the European Union's new financial stability backstop, handed over the first loans agreed under the controversial Cyprus aid deal.

The deal was set in March after the Cypriot government agreed to force depositors and bondholders in Cyprus's leading banks to take huge losses in order to keep the country's banking system from imploding.

The release of the funds came as official data released earlier on Wednesday showed Cyprus's economy contracted by 1.3 per cent in the first quarter from the previous quarter, and 4.3 per cent year-on-year.

It was the seventh successive quarter in which the Mediterranean island's economy has been in negative territory.

Construction, manufacturing, electricity, transport, trade, tourism and services all declined from January to March.

According to the IMF, the European Commission and the European Central Bank - the troika of international lenders who set the bailout program - the Cypriot economy is expected to contract 8.7 per cent this year and 3.9 per cent in 2014.

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Aust market opens higher

THE Australian market has opened slightly higher despite falls in resources stocks.

IG market strategist Stan Shamu said commodity prices continued to fall overnight and he expected resources stocks to drop during the day, especially gold.

"Commodities remained under pressure overnight with notable weakness in gold," he said.

"We expect gold names to struggle today, led by Newcrest Mining which is headed for its lowest level since June 2006 of $15.64."

Newcrest shares opened 81 cents, or 5.11 per cent, lower at $15.05.

The mining giants all dropped on opening.

BHP Billiton lost 11 cents to $33.92, Rio Tinto dived 53 cents to $55.24 and Fortescue tumbled six cents to $3.53.

The four major banks all opened in positive territory.

Commonwealth Bank surged 79 cents to $73.44, National Australia Bank jumped 14 cents to $33.21, ANZ added eight cents to $30.06 and Westpac gained five cents to $31.72.

Graincorp shares fell 0.5 cents to $12.745 after it announced its first half profit had fallen by 34 per cent due to costs from its purchase of several food companies.

Australia's largest grain handler is also currently working with food giant Archer Daniels Midland to complete a $3 billion takeover.

In economic news on Thursday, the Australian Bureau of Statistics is due to release March international merchandise imports data.

KEY FACTS

* At 1016 AEST on Thursday, the benchmark S&P/ASX200 index was up 14.3 points, or 0.28 per cent, at 5,206, while the broader All Ordinaries index was up 13.5 points, or 0.26 per cent, at 5,186.8.

On the ASX 24, the June share price index futures contract was up eight points at 5,209, with 9,973 contracts traded.

* National turnover was 226.93 million securities worth $774.71 million.

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Takeover target Graincorp's profit drops

GRAINCORP'S first half profit has fallen by 34 per cent due to costs from its purchase of several food companies and its response to a takeover offer from the United States.

Australia's largest grain handler is currently working with food giant Archer Daniels Midland to complete a $3 billion takeover.

Graincorp said on Thursday it made a net profit of $88 million in the six months to March 31, down from $133.7 million in the same period last year.

The result included $20 million in costs related to Graincorp's response to ADM's takeover offer, plus the company's acquisition of the Gardner Smith and Integro food oils businesses.

Underlying profit, which excludes those costs, was $108 million, down 11 per cent from $122 million in the previous corresponding period.

Chief executive Alison Watkins said the result reflected the eastern Australian harvest returning to a more typical size after several bumper seasons.

The new oils business delivered more than $400 million in additional revenue, contributing to total revenue to $2.4 billion in the six months to March, up 40 per cent from the previous corresponding period.

"Another positive first half performance demonstrates the benefits of GrainCorp's diversification strategy, as grain receivals returned to more normal levels following two very large harvests," Ms Watkins said in a statement.

ADM's due diligence procedures have been completed and management is working with the US company to progress the takeover bid, Graincorp said.

It declared a fully franked interim dividend of 25 cents per share, which included a five cent special dividend.

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BHP Billiton to slash capital spending

BHP Billiton's new chief executive Andrew Mackenzie has outlined plans to slash capital spending by almost a fifth.

In his first major address as head of the world's biggest resources company, Mr Mackenzie said capital and exploration expenditure would be cut to $US18 billion ($A18.28 billion) in 2013/14, from a peak of $US22 billion during this financial year.

"The rate of spend is expected to decline substantially thereafter," he told a mining conference in Barcelona on Tuesday night (AEST).

"By reducing our annual spend and increasing internal competition for capital, we expect to maximise returns from incremental investment, while delivering a substantial increase in the group's free cash flow."

Controllable cash savings of $US1.9 billion ($A1.93 billion), for the first half of 2012/13, were identified in his presentation, with controllable cash costs estimated at $US944 million ($A958.72 million).

Mr Mackenzie, a Scotsman who took over from Marius Kloppers last week, presides over a resources giant that last year endured a 58 per cent fall in first-half profit and a $US3 billion writedown on US shale assets.

But the new chief executive was confident the resources giant would enjoy better days, as it focused more on iron ore, coal, petroleum and copper.

"This is a wonderful time to be at the helm of the world's largest natural resources company," he said.

"We believe our strategy, when combined with our great ore bodies, will deliver stronger margins throughout the economic cycle, a simpler and more capital-efficient structure, a substantial increase in free cash flow and growth in shareholder value."

His speech was made after the Australian market closed on Tuesday.

BHP Billiton shares were down 64 cents at $34.03 on Wednesday.

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CBA lifts profit to $1.9bn

Miners holding back bad news for Australian market.

Source: AFP

COMMONWEALTH Bank says quarterly cash earnings jumped 8.6 per cent, but has warned that a competitive market is putting pressure on its loan deposit margins.

Australia's biggest bank today said cash earnings had risen to $1.9 billion in three months to March, up from $1.75 billion in the same period last year. Net profit for the period was $1.9 billion, up 12 per cent.

"Revenue growth continued to reflect a combination of conservative business settings and modest system credit growth,'' the bank said today.

Commonwealth Bank in February delighted investors after beating expectations with a "cracker'' first-half result.

The bank cash profit - a measure of its underlying performance - surged 6 per cent to $3.78 billion for the six months to December. Analysts said the latest quarterly result would again please shareholders.

"Commonwealth Bank continues to deliver earnings of increasing quality and strength,'' Morningstar head of financials David Ellis said. "Quarterly earnings are in line with our expectation, and our positive view is intact."

"Our 2013 cash profit forecast of $7.5 billion needs to be reassessed with an earnings upgrade likely."

"Importantly, future dividends look increasingly sustainable.''

The bank last week passed on in full the Reserve Bank's 25 basis point interest rate cut. Commonwealth Bank shares opened more than 1 per cent higher this morning at $72.85.

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Aust bonds firmer after weak overseas data

AUSTRALIAN bond futures prices are higher as weak economic data from the US and Europe sparks a move into safe-haven assets.

During the overnight session, it was reported that the euro zone recession continued into a six quarter in the first three months of 2013.

The recent run of good economic figures from the US came to an end, with falls in industrial production for April and manufacturing activity in New York state in May.

St George economist Janu Chan said the figures dampened hopes that the US Federal Reserve was getting ready to wind down its economic stimulus program.

"Weakening manufacturing and subdued price data raised some concerns about health of the US economy," she said.

"Investors may have been encouraged that the Federal Reserve will hold off from tapering off its asset purchases (quantitative easing) for longer."

Ms Chan said the continuation of quantitative easing helped support US Treasuries prices.

At 0830 AEST on Thursday, the June 10-year bond futures contract was trading at 96.750 (implying a yield of 3.250 per cent), up from 96.730 (3.270 per cent) on Wednesday.

The June three-year bond futures contract was at 97.430 (2.670 per cent), up from 97.410 (2.590 per cent).

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Honey, I shrank Melbourne and Sydney

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso Source: Supplied

• Designer captures beauty of Australia's biggest cities
• Melbourne film follows earlier success shooting Sydney
• 10 months shooting followed by weeks in edit suite

A TALENTED young Australian graphic designer has won a coveted Staff Pick on video-sharing website Vimeo for his latest tilt-shift time-lapse magnum opus.

Melbournian Nathan Kaso won rave reviews earlier this year when his short film Toy Boats, capturing a day in the life of Sydney’s harbour and beaches, was recognised by editors on Vimeo, the website dubbed "the cool kids YouTube."

Buoyed by his success, Kaso has now released his debut homage to his home town, a four minute masterpiece entitled Miniature Melbourne.

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

Miniature Melbourne from Nathan Kaso on Vimeo.

"I’ve been doing time-lapses for a couple of years, mainly with landscape photography," explains Kaso.

"There are lots of tricks to pick-up along the way."

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

Time-lapses are a series of still images taken at set intervals, then edited into a video.

So far so formulaic.

What sets Kaso's wonderful work apart from regular time-lapse is that he mashes it up with tilt-shift. An increasingly popular photographic technique, tilt-shift blurs the edges of an image around an area in focus, making it seem as if the scene captured is in miniature.

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

"Tilt-shift is actually pretty easy to do if you know how," says Kaso.

"The main thing is to shoot from a high angle at a flat perspective with a zoom lens."

The new film is mostly shot from the look-out of the Eureka Tower, the 297m tower that dominates Melbourne.

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

"The Chinese New Year scenes were shot from a car park, other shots were filmed from bridges. I did a lot of walking around looking for open roofs"

"The whole project was shot over ten months, starting in July last year," explains Kaso.

"I bought an annual pass for the Eureka, which gave me nine or ten trips to the highest point in the city to shoot without restrictions - well, you have to shoot though glass, but it’s surmountable.”

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

Why is tilt-shift such a popular technique? "It offers a refreshing perspective on things, makes the viewer look at the scene in a different way, makes it look fun and cute."

Toy Boats from Nathan Kaso on Vimeo.

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Sydney, Australia. Picture: Nathan Kaso

Simon Crerar is News Limited's Visual Story Editor. Follow him at twitter.com/simoncrerar

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Sydney, Australia. Picture: Nathan Kaso

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Melbourne, Australia. Picture: Nathan Kaso

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Sydney, Australia. Picture: Nathan Kaso

Miniature metropolises: a short tilt-shift time-lapse film featuring the city of Sydney, Australia. Picture: Nathan Kaso

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Boeing resumes 787 deliveries

US aerospace giant Boeing has resumed deliveries of its troubled 787 Dreamliner aircraft. Source: AAP

BOEING says it has resumed deliveries of its 787 Dreamliner aircraft, suspended since January after the airplane was grounded globally because of overheated battery problems.

"Boeing has resumed 787 deliveries with an airplane delivered today in Everett to ANA," the US aerospace giant company said in a statement on Tuesday, referring to Japan's All Nippon Airways and Boeing's factory in Washington state.

"Despite the disruption in deliveries over the past several months, we still expect to deliver all the 787s we originally planned to by the end of the year," Randy Tinseth, Boeing vice president of marketing for Boeing Commercial Airplanes, said in a Boeing blog.

"We once again thank our customers for their patience and confidence as we begin delivering on our commitments."

All 50 of the Boeing 787s in service were grounded in mid-January after a battery fire on a Japan Airlines plane parked at Boston airport and battery smoke on an ANA plane forced an emergency landing in Japan.

On April 25, the US Federal Aviation Administration approved Boeing's 787 battery fix that cleared the way for the aircraft to fly again. Ethiopian Airlines was the first airline to restore 787 service, two days later.

ANA, the first and biggest 787 customer with 17 of the high-tech planes in its fleet, said last week it would resume flights with the battery-modified 787s on June 1.

On Monday, United Airlines, the only US airline flying the Boeing 787, said it would resume domestic Dreamliner flights beginning May 20 on routes from Houston, Texas, to other domestic hubs.

United also announced the June 10 launch of its Denver-Tokyo service using the aircraft.

Despite the global grounding, Boeing had continued to build 787s at a rate of five aeroplanes per month.

The company said it was on track for a planned 10-a-month production rate by year-end, using its plants in Everett and in South Carolina.

Shares in Boeing, which earlier in the day announced an order from Turkish Airlines for 70 single-aisle 737s, were up 1.2 per cent at $US95.90 in late-afternoon New York trade.

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Dollar higher, yen slips again

THE US dollar has edged higher following last week's strong gains and the yen has slipped again after G7 finance chiefs reiterated over the weekend their pledge against competitive devaluations.

At ,2100 GMT on Monday (0700 AEST on Tuesday) the euro traded at $1.2975, compared to $1.2992 late Friday, holding in a narrow range during a day with little news to move trade.

The dollar picked up to 101.82 yen from 101.59, but pulled back from the 102-yen line in early trade, while the euro rose to 132.11 yen compared to 132.05 yen on Friday.

Christopher Vecchio, currency analyst at DailyFX, said the market needed to take a breather on Monday.

"Commentary from the G7 meeting was roundly supportive of Japan's policies, with the Japanese envoy declaring victory upon leaving London, gleefully noting that no G7 member was opposed to the country's aggressive and fiscal easing policies."

"If the yen continues to weaken at its current pace, the G7 is likely to change its tune. But for now, there's little exogenous pushback."

The British pound weakened, falling to $1.5298 from $1.5354, while the dollar pushed higher against the Swiss franc, to 0.9575 franc from 0.9560.

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US stocks rally to new record highs

US stocks have surged to new all-time closing highs on renewed optimism after a prominent hedge fund manager said the stock rally of 2013 still has more room to go.

The Dow Jones Industrial Average rose 123.57 (0.82 per cent) to a record 15,215.25.

The broad-based S&P 500, also reaching a new high, added 16.57 (1.01 per cent) at 1,650.36.

The tech-rich Nasdaq Composite Index increased 23.82 (0.69 per cent) to 3,462.61.

Analysts said there was little fresh economic news driving the gains, but pointed to bullish investor David Tepper, head of the Appaloosa Management hedge fund group, who told CNBC that the market could still go higher.

"It's hard to connect the market performance to any news," said Hugh Johnson of Hugh Johnson Advisors, who cited the Tepper comments.

"There's not a real good sign that this cycle is going to end any time soon."

Banks were among the biggest gainers. JPMorgan Chase added 1.2 per cent, Citigroup rose 2.4 per cent, Bank of America jumped 2.8 per cent and Goldman Sachs put on 3.3 per cent.

Some pharmaceutical firms also fared well. Bristol-Myers Squibb rose 3.1 per cent, Gilead Sciences added 3.3 per cent and Biogen Idec jumped 3.2 per cent.

Take-Two Interactive Software, which develops interactive entertainment, rose 0.9 per cent after reporting $299.5 million in revenues, above the $280.4 million forecast by analysts. The company pointed to an "extensive pipeline of next-generation and emerging platform titles in development."

Western Gas Partners, which owns and operates pipelines and other midstream energy assets, fell 3.5 per cent to $61.00 after pricing a new issue of 6.1 million shares at $61.18, with the proceeds aimed at paying down debt and funding its capital program.

Handbag and accessory firm Coach dipped 0.1 per cent after The Wall Street Journal reported the company is considering acquisitions.

Sony's US-traded shares shot up 9.9 per cent after The New York Times reported that activist investor Daniel Loeb had begun pushing for a breakup of the struggling Japanese electronics giant.

Bond prices dropped. The yield on the 10-year US Treasury rose to 1.95 per cent from 1.92 per cent late on Monday, while the 30-year jumped to 3.16 per cent from 3.13 per cent. Bond prices move inversely to yields.

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Social networks key to career success

Source: The Courier-Mail

THE NEW YORK TIMES ran an illuminating article this week highlighting the subtle factors that hold certain groups back in the workplace.

Nancy DiTomaso, who conducted research on the unemployment disparity between whites and blacks in the US, finds that the driving but unspoken force behind it is often the favouritism that results from social networking.

We all know how important networking is -- most of us probably didn't get our jobs by cold-submitting a resume. So it makes sense that disadvantaged groups -- no matter their skills -- have a much harder time finding an "in." "In the context of widespread networking, the idea that there is a job 'market' based solely on skills, qualifications and merit is false," writes DiTomaso.

So while outright discrimination may not be as big a factor in inequality as it once was, the side effects or our not-fully-integrated lives continue to weigh heavily on success.

Is this kind of favouritism affecting you? Have you had help because of your social networks? Let us know in the comments.

And since networking is a necessary part of modern life, here's how to build one:

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US on track to cut deficit by 40% in 2013:

THE US budget deficit will fall to $US642 billion ($A652.01 billion) this year from $US1.1 trillion in fiscal 2012, helped by surging revenues and repayments from housing agencies rescued in the 2008 crisis, the Congressional Budget Office forecast on Tuesday.

That was more than $US200 billion lower than the deficit projected by the CBO in February.

The decline to the smallest US fiscal shortfall since 2008 was "mostly as a result of higher-than-expected revenues and an increase in payments to the Treasury by Fannie Mae and Freddie Mac".

The two mortgage giants, put under government control in 2008 as they neared collapse, have since recovered profitability and are paying dividends on stock held by the government.

The latest CBO estimates take into account the severe automatic "sequester" spending cuts that began on March 1, aimed at slicing $US85 billion from expenditures through the end of September.

The CBO estimated the US deficit would fall to 4.0 per cent of gross domestic product compared with 7.0 per cent in 2012.

Even as the budget deficit is narrowing quickly, the CBO said the country's debt ceiling would likely need to be raised by October or November to keep funding the government.

By congressional law, the US Treasury will be blocked from borrowing any additional money to fund the deficit after May 18. The Treasury has said it has special measures it can take to manage under the ceiling for several months, at least September.

Congressional Republicans, battling the White House over how to close the deficit, have linked increasing the statutory ceiling to agreeing a new federal budget and long-term debt reduction plan.

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Oil falls as IEA cites US 'supply shock'

CRUDE prices have fallen after the International Energy Agency said the output boom in North America was sending a "supply shock" across the world.

New York's main contract, WTI light sweet crude for June delivery, dropped 96 cents to close at $94.21 a barrel.

In London trade, Brent North Sea crude for June dipped 22 cents to $102.60 a barrel.

The International Energy Agency fuelled bearish sentiment in a report predicting growing crude oil supply through 2018, led by North America, that would outstrip demand.

The IEA raised marginally its outlook for global demand growth in 2013 to 90.6 million barrels per day (bpd).

The IEA hiked its forecast for non-OPEC supply in 2013 by 50,000 barrels to 54.5 million bpd owing to the projected strong output in North America.

"The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15," the IEA said.

"North America has set off a supply shock that is sending ripples throughout the world," said IEA Executive Director Maria van der Hoeven while presenting the agency's five-year outlook for the oil market.

"The world will remain well supplied ... and price volatility will come from macro events or geopolitical concerns where any price spike will be temporary, given the supply cushion," said Andrey Kryuchenkov, an analyst at Russian financial group VTB Capital.

"Whichever way you look at it - it is an energy revolution and even though many will doubt it can be replicated outside North America, it proves that higher prices triggered a boost to capacity that will continue to outpace slack post-crisis demand growth," he told AFP.

Crude futures had fallen on Monday on fresh signs of economic weakness in China - the world's largest energy consumer, and also remained under pressure by brimming US stockpiles, which rose to a record level last week.

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Car owners sue Ford over problem engine

THREE Ohio drivers are suing Ford Motor Co., claiming the company's six-cylinder EcoBoost engine is defective.

The lawsuit says the 3.5-litre V6 EcoBoost engine can shudder, shake and then rapidly lose power while drivers are accelerating.

Two of the plaintiffs, a married couple, say their 2010 Ford Taurus SHO has lost power and stalled on multiple occasions. The third says he has lost power when he was accelerating in his F-150 pickup.

The lawsuit says more than 100 drivers have complained to the National Highway Traffic Safety Administration (NHTSA) about the V6 EcoBoost rattling or losing power.

Ford hasn't recalled any vehicles for the alleged defect, and NHTSA hasn't opened an investigation, which is often the first step in the recall process.

The lawsuit claims Ford has acknowledged the problem in messages to dealers, but hasn't informed owners.

Ford declined to comment on Tuesday, saying it hasn't seen the lawsuit.

The company wouldn't say how many vehicles it has sold with the V6 EcoBoost engine.

Ford has been selling vehicles equipped with the V6 EcoBoost since late 2009. It's an option on the Ford Flex, Taurus SHO, Lincoln MKT and Lincoln MKS sedans from the 2010-2013 model years; the F-150 pickup from the 2011-2013 model years; and the Ford Explorer Sport from the 2013 model year.

Ford also makes four-cylinder and three-cylinder EcoBoost engines, but those aren't cited in the lawsuit.

All three engines use turbocharging and direct injection to give them the power of a larger engine with the fuel economy of a smaller one.

The lawsuit was filed late last week in US District Court in Columbus.

A similar lawsuit involving different drivers was filed last month in US District Court in Louisiana.

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CBA lifts Q3 profit 12 per cent to $1.9B

COMMONWEALTH Bank of Australia has lifted its third quarter profit by 12 per cent to $1.9 billion.

Australia's largest home lender said market conditions remained subdued during the three months to March 31, but it managed to grow its loan and deposit portfolios above the banking industry's average rate.

CBA's unaudited net profit in the period was up from $1.75 billion in the same period last year.

The bank's cash profit in the three months to March, which excludes one-off financial items, was also approximately $1.9 billion, up 8.5 per cent on the previous corresponding period.

"Revenue growth continued to reflect a combination of conservative business settings and modest system credit growth," the bank said in a statement on Wednesday.

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Aust market opens higher

THE Australian market has opened higher due to strong overseas leads and the falling Australian dollar.

IG market strategist Evan Lucas said the local market was off to a positive start after Wall Street and European market posted strong gains overnight and the Australian dollar continued to slide.

"Capital goods, health care and financial services could go on a tear, with the dollar falling and will raise earnings optimism for the second half if stays underwater," Mr Lucas said.

The Australian dollar remained below parity at 99.10 US cents and continued to fall.

Health care stocks all opened in positive territory.

Primary Health Care jumped 10 cents to $5.13, CSL surged $1.44 to $64.64 and Cochlear gained $1.04 to $73.67.

The four major banks also opened higher.

Commonwealth Bank leapt 71 cents to $72.80, after it said its third quarter profits were up 12 per cent to $1.9 billion.

Westpac added 28 cents to $32.03, ANZ jumped 20 cents to $30.09 and National Australia Bank gained 15 cents to $33.25.

The mining giants had a lacklustre opening.

BHP Billiton lost 30 cents to $34.37 after new chief executive Andrew Mackenzie, at a conference in Barcelona, signalled plans to slash capital spending by almost a fifth.

Rio Tinto dived 80 cents to $56.75 while Fortescue fell 8.5 cents to $3.655.

US stocks surged to new all-time closing highs on Tuesday on renewed optimism after a prominent hedge fund manager said the 2013 rally has further to go.

The Dow Jones Industrial Average rose 123.57 (0.82 per cent) to a record 15,215.25, while the S&P gained 1.1 per cent, or 16.57 points, to 1,650.36.

Leading European stock markets climbed while the euro edged lower against the US dollar as traders welcomed German investor sentiment data and digested corporate results.

London's benchmark FTSE 100 index of leading shares closed up 0.82 per cent at 6,686.06 points.

KEY FACTS

* At 1022 AEST on Tuesday, the benchmark S&P/ASX200 index was up 15.8 points, or 0.3 per cent, at 5,236.4, while the broader All Ordinaries index was up 14 points, or 0.27 per cent, at 5,216.5.

On the ASX 24, the June share price index futures contract was up 17 points at 5,215.5, with 8,403 contracts traded.

* National turnover was 207.42 million securities worth $406.3 million.

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Optus suffers 7.5pc slump in FY net profit

Australian telco Optus suffered a 7.5 per cent slump in net profit for the year to March 31. Source: AAP

AUSTRALIA'S second-biggest telco, Optus, has suffered a 7.5 per cent slump in net profit for the year to March 31.

But its earnings have risen three per cent for the three months to March 31 and one per cent for the year.

In what it described as "stable" financial results, Optus on Wednesday said its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew to $700 million for the March quarter.

It recorded the result against a backdrop of what it described as "negative revenue growth in the Australian mobile industry".

Full year EBITDA grew to $2.38 billion despite a five per cent decline in revenue.

However, its net profit for the year dropped by 7.5 per cent to $728 million and by 6.9 per cent for the March quarter to $249 million.

Optus' underlying net profit, which excludes one-off items, fell by 4.5 per cent to $764 million for the year and by 3.6 per cent to $257 million for the March quarter.

The telco's chief country officer, Australia, Kevin Russell said Optus was focused on "driving sustainable, profitable growth and positioning itself to capitalise on mobile data revenue growth".

"We are committed to a sustainable business model and to rekindling the spirit of the Optus brand with a transformation program that fundamentally improves the services we deliver to our customers," he said in a statement.

"Optus is building a strong, highly competitive mobile network through investments that are delivering enhanced 3G in-building coverage and 4G services in major population centres."

Optus continued to grow its postpaid mobile customer base with net additions of 28,000 for the quarter.

Postpaid customers now comprise 57 per cent of the total base, up two percentage points from a year ago.

Prepaid subscribers remained stable at 4.09 million.

Optus grew the number of 4G mobile handsets on its network to 785,000.

Optus is a wholly-owned division of Singapore Telecommunications.

SingTel on Wednesday announced a two per cent drop in fourth-quarter underlying net profit to $S1 billion ($A810 million).

Its full-year underlying net profit fell two per cent to $S3.61 billion while its underlying net profit for the quarter, when exceptional items were included, fell 33 per cent to $S868 million.

That figure was due to a one-time loss of $S225 million from the divestment of telco Warid Pakistan.

Revenue for the group was down six per cent to $S4.48 billion but EBITDA was stable at $S1.43 billion.

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