Overview: Wall Street started the day in downbeat mood after household goods company Johnson & Johnson became the latest company to release its Q3 figures, reporting a 5% sales decline. The company’s shares went south and so did the stock market with the Dow Jones industrial average slipping more than 0.5% in early trade.
The news caused the FTSE 100 to decline 0.8% after balancing around the opening level for most of the day. The blue chip index failed to recover and stayed down until trading closed as miners, oil & gas and banking stocks all turned negative.
Commodities
November Brent Crude slipped to US$71.54/barrel, while US light, sweet crude for November delivery retreated to US$73.36/barrel.
Oil and gas stocks mostly declined. BG Group (LSE: BG) was the only FTSE 100 constituent to stay in the positive with a small gain. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) declined marginally, as did Petrofac (LSE: PFC). Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) both shed about 1.2%.
Midcaps did slightly better. Dana Petroleum (LSE: DNX) managed to post a 2.5% gain, while Dragon Oil (LSE: DGO) added less than 1%. Heritage Oil (LSE: HOIL) declined insignificantly.
Mongolia-focused Petro Matad Ltd (AIM: MATD) led the sector with an 8.5% gain. Chinese coal bed methane business Green Dragon Gas (AIM: GDG) followed with a 6% advance. Kazakhstan operating Max Petroleum (LSE: MXP) also did well, climbing 4%.
North American based explorer Nighthawk Energy (AIM: HAWK) went in a different direction, sliding 7%. Latin America operating junior Gold Oil (AIM: GOO) lost 5.5%, while EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and Europe focused oil and gas developer Ascent Resources (AIM: AST) both lost 4.5%.
Precious metals
Gold struggled to hold on to US$1,060/oz, while Silver retreated to US$17.68/oz. Platinum held steady at US$1,350/oz.
Mining stocks were mixed today. Gold miner Randgold Resources (LSE: RRS) emerged as the leading faller in the FTSE 100 with a 2% slide. Silver producer Fresnillo (LSE: FRES) and platinum miner Lonmin (LSE: LMI) did better, climbing 1% and 2% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) shed less than 1%. Yamana Gold (LSE: YAU) posted insignificant gains.
Midcaps fell into the same pattern. Hochschild Mining (LSE: HOC) declined 2%, but gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) posted small gains.
Australian gold and copper prospector Solomon Gold (AIM: SOLG) was one of the leading fallers in the sector, sliding 10%. Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Africa operating gold miner GMA Resources (AIM: GMA) lost 8%. Brazil focused gold miner Horizonte Minerals (AIM: HZM) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) voth shed almost 6%.
Nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR) and Africa focused gold miner Pan African Resources (AIM: PAF) declined 4%. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML), Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) all lost about 3%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF), South American based explorer Mariana Resources (AIM: MARL) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) took a different path, rising over 5%. Africa focused gold deposit developer Cluff Gold (AIM: CLF), Copper and gold miner EMED Mining (AIM: EMED), Philippines focused Metals Exploration (AIM: MML) and Fiji focused miner Vatukoula Gold Mines (AIM: VGM) all shed more than 2%.
Base metals
Copper and Nickel fell sharply, declining to US$2.76/pound and US$8.28/pound respectively. Zinc moved down to US$0.91/pound.
Base metals focused stocks all turned negative, with the exception of Kazakhmys (LSE: KAZ), which posted small gains after selling its 25% stake in a power plant in Kazakhstan. Eurasian Natural Resources (LSE: ENRC) and Antofagasta (LSE: ANTO) both shed more than 1.5%. BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) declined almost 1%. Anglo American (LSE: AAL) and Vedanta Resources (LSE: VED) were down marginally.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, dropping 1.5%.
Diversified miner Finders Resources (AIM, ASX: FND) emerged among the leading risers in the sector with a 12% rally. Cement operator Prosperity Mineral Holdings (AIM: PMHL) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) added more than 6%. Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) was up 4.5%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and iron ore focused investor Red Rock Resources (AIM: RRR) went in a different direction, slipping 8% and 7% respectively.
South American focused junior miner Herencia Resources (AIM: HER) and laterite nickel specialist European Nickel (AIM: ENK) declined 4%, as did zinc mining and recycling specialist ZincOX (AIM: ZOX).
Banks, insurance, private equity
Almost all financials turned negative today following the downgrade of Goldman Sachs to “neutral” from “buy” by Meredith Whitney.
Barclays (LSE: BARC) emerged as the leading faller with a 2.9%, while bailed out banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) both shed almost 2%.
HSBC (LSE: HSBA) was down 1.7%, while Standard Chartered (LSE: STAN) declined marginally.
With the exception of Old Mutual (LSE: OML), which tacked on 1%, and RSA Insurance Group (LSE: RSA) all insurers slipped into the red. Legal & General (LSE: LGEN) and Prudential (LSE: PRU) lost more than 2%. Standard Life (LSE: SL) and Aviva (LSE: AV) retreated 1.8%, while Friends Provident (LSE: FP) declined 2%.
Home credit and motor finance specialist S & U PLC (LSE: SUS) moved with the market, slipping 4.5%.
Large and Mid Cap News
Shaanxi Yanchang Petroleum (SH:600248) and Royal Dutch Shell's (LSE: RDSA) joint venture plan to build 100 petrol stations in the northwest Shaanxi Province, the Dutch oil company announced yesterday after launching it 10th station in the province.
Ferrexpo PLC (LSE: FXPO) said it has been producing at full capacity throughout the third quarter 2009, for the second consecutive quarter, and that pellet production from own raw materials rose by 0.3 percent in the third quarter from the second, to 2.248 million tonnes. Cazenove issued a note on Ferrexpo following the company’s interim management statement and production figures for the third quarter.
Construction services company Carillion (LSE: CLLN) said today its joint venture with telent, Carillion-telent, signed a seven-year, £1 billion support services contract with telecom company BT’s (LSE: BT) local access network business Openreach.
Housing support services group Connaught PLC (LSE: CNT) reported strong results for the year ended 31 August 2009. with "excellent" revenue and profit growth in both ITS Social Housing and Compliance operations.
HSBC (LSE: HSBA) said today its 40% owned Saudi British Bank’s Q3 profit fell almost 20%, double the expected fall, as the bank’s credit policy remained conservative in the current economic environment, while income from associates declined 64.8%, reflecting “the challenging market conditions” experienced this year.
UK based consumer healthcare business SSL International plc (LSE: SSL) updated investors on its six months trading performance ahead of November’s release of the interim results. In the first half sales have increased to £387m, up to 20% compared to the corresponding period in 2008.
UK food and drug wholesaler Booker Group plc (LSE: BOK) reported results for the 24 weeks ended 11 September 2009, showing a 7.7% increase in like-for-like sales with an increase in profits after tax of over 12% to £24.7m. Overall the figures fell in-line with earlier guidance and some investors appear to have taken profits following the recent strength of the share price. Booker’s shares slipped 2p to trade at 43.5p per share on Tuesday.
Small Cap News
Platinum Australia Ltd (ASX: PLA; AIM:PLAA) announced that the initial indicated and inferred mineral resources estimate for the Mira deposit at the Kalplats platinum group metals project in South Africa has defined a total resource of 6.63 million tonnes at 1.43 grammes per tonne 3E (platinum, palladium and gold) containing 304,800 oz 3E.
Wave technology specialist Ocean Power Technologies (AIM: OPT, NASDAQ: OPTT) signed a agreement with security firm Lockheed Martin (NYSE: LMT) to develop OPT’s wave energy systems for utility-scale power generation projects on the west coast of the US.
Bespoke software systems supplier and support services group SciSys PLC (AIM: SSY) said its subsidiary VCS AG won a new €1 million contract with AGeoBW, the German Military Geo-information Service, which involves the upgrade of the complete satellite ground station located in Traben-Trarbach, Germany.
Cheshire-based carbon ceramic technology specialist Surface Transforms PLC (AIM: SCE) announced the commencement of its three year £2.1 billion collaborative research and development project to develop a new ceramic disk using waste carbon and contemporary manufacturing processes, with £1.12 billion already secured in grants from the UK Technology Strategy Board.
A proposed merger between Uruguay Minerals (AIM: UGY, TSX-V: UME) and Fortune Valley (TSX-V: FVX) is set to create a significant Latin American focused gold producer. A newly combined group would have the financial and technical resources to develop its business and capitalise on growth opportunities in Latin America. Additionally the group would have no debt and no hedging, with approximately $8m of cash.