Wall Street and Australian shares jump on good news: Economy roundup

The stock market in the US has managed to climb over the 9000 point barrier for the first time since January, after manufacturer 3M, telco AT&T and online auction-house eBay all recorded better than expected results.

The Dow Jones Industrial Average rose 188.03 points or 2.12% to 9069.12, the highest closing point since November 2008 and the first close above 9000 since January.

Shares in manufacturer 3M rose 7.4% to $US69.43, while AT&T also rose 2.6% to $US25.48 after it announced a smaller-than-expected drop in quarterly profit.

But there was bad news for Newmont Mining Corporation, as the world’s second largest gold producer reported a 3.6% decline in second quarter earnings to just $US213 million. But chief executive Richard O’Brien also said the company was satisfied after lowering operating costs.

“I am pleased to report that our costs applicable to sales were 4% lower than last year’s quarter, resulting in an operating margin of $US492 per ounce for the quarter,” O’Brien said.

The company also said its new Boddington mine in Western Australia is predicted to produce less gold this year than expected.

Australian share market rises on US stocks

But the good news on Wall Street continued in the Australian market, where shares in major mining companies and banks have moved the share market upwards.

The benchmark S&P/ASX200 was up 46.1 points or 1.13% to 4110.2 at 12.00 AEST. The Australian dollar also lost some ground, moving back to US81c.

Commonwealth Bank shares rose 2.5% to $39.92, with ANZ also gaining 1% to $16.94. Westpac rose 1.9% to $19.99 as NAB gained 0.9% to $22.56.

Retailer Country Road has upgraded full year profit forecasts by up to 56% after recording strong sales and profit growth.

The company expects profit before tax to jump from $14 million to between $21.3 million and $21.8 million. Sales in the second half increased by 16.8%, while sales were 18.4% stronger for the full year. .

Country Road chief executive Ian Moir said the year was “outstanding”.

“Our focus on providing exceptional value has proven successful among our increasing customer base as the search for value intensified in a deteriorating economy,” Moir said.

“We are well placed and on schedule for the launch of Trenery in South Africa in early August and in Australia where we will open five stores in September and a sixth in November.”

ANZ announces Morschel as new chairman

ANZ has announced John Morschel as its new chairman after Sir Rod Eddington withdrew an offer to serve in the role, succeeding Charles Goode.

Morschel, formerly chief executive at Lend Lease, has been a director at ANZ since October 2004 and said he looks forward to taking over the role in February 2010. Goode said he was pleased with the appointment.

“John is one of Australia’s most respected business leaders who has extensive experience as a chief executive and more recently as a non-executive director and chairman of major Australian and international companies,” Goode said in a statement.

“John will also bring to the role a strong background in banking and financial services.”

Reserve Bank of Australia assistant governor Guy Debelle has spoken out over fears regarding the Government’s debt levels, saying the country will be able to cope with the current account deficit.

“Australia has come out of this episode … relatively well,” Debelle said. “I think we can deal with the deficit without too much drama.”