Warehouse rises after interims, market weakens

Friday 11th March 2011

The Warehouse Group's shares rose slightly in opening trade after the discount retailer reported a fall in interim profit.

The rise came even as equity markets around the world weakened after a downgrade of Spain's credit rating and trade data from China spooked investors.

The benchmark NZX-50 index was down 17.231 points at 3389.004 in early trading after falling 8.19 points yesterday.

The Warehouse (NZX: WHS ) rose 2c to $3.40 in thin opening trade after the company reported a fall in interim profit but held its interim dividend. The company is being hurt by lower CD and DVD sales but said sales in many categories are growing, including in homewares, appliances, sporting goods and everyday health and beauty. The company is forecasting a full-year net profit between $76 million and $80 million compared to $83 million last year.

Air NZ (NZX: AIR ) rose 2c to $1.24 after it said yesterday it was increasing airfares. Telecom (NZX: TEL ) eased a cent to $2.03 and Contact Energy (NZX: CEN ) eased 2c to $5.97.

Fletcher Building (NZX: FBU ) eased 8c to $8.78 on a day a senior executive said it could cost $30 billion to rebuild Christchurch after the earthquake.

Mainfreight's (NZX: MFT ) stellar rise this week after announcing a deal to buy Netherlands-based transport and logistics firm Wim Bosman Group was again interrupted. It eased 12c to $8.76 after falling 22c yesterday.

In the US, Fears about the economy and unrest in the Middle East sent indexes skidding below key technical levels on Thursday as the near-term outlook for stocks grew cloudy.

All three major indexes fell below their 50-day moving averages, a medium-term momentum indicator that many traders see as a sign of a market inflection point.

A ratings agency's downgrade of Spain, an unexpected swing to a trade deficit in China and US jobless data were the initial catalysts for the selloff.

Selling was aggravated in the early afternoon after reports that authorities in Saudi Arabia had opened fire on demonstrators, which caused oil prices to pare losses.

In late afternoon trading the Dow Jones industrial average fell 212.21 points, or 1.74%, to 12,000.88. The Standard & Poor's 500 Index lost 22.41 points, or 1.70%, to 1297.61. The Nasdaq Composite Index dropped 47.38 points, or 1.72%, to 2704.34.

NZPA

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