New home sales fall again, Shares lose ground: Economy Roundup

New home sales fell by 0.2% during November 2010 with detached housing sales falling by 1.1%, according to the latest figures provided by the Housing Industry Association.

HIA economist Harley Dale said in a statement that building conditions have worsened and that the November interest rate hike didn’t help.

“The risk of a sharp contraction in new home building in 2011 is exacerbated by the negative impact on households and small businesses of increases in borrowing costs and by the persistent lack of available credit for small- and medium-sized new home projects,” Dale said.

“It would be a shot in the arm for confidence and activity in the residential sector to see the New Year kicked off by a re-engagement of housing policy reform by the Federal Government to address a range of supply side constraints including the credit squeeze.”

Macarthur Coal downgrades profit forecast

Macarthur Coal has said in a statement that its net profit tax for the first half of 2011 is forecast to be in the lower range of $97-102 million due to Queensland’s flood crisis.

“Record rainfall at Coppabella and Moorvale mines in December (Coppabella 611mm and Moorvale 475mm) has continued to hamper coal mining and production,” it said in a statement.

But the company has also said that coal sales to December 31 were 2.4 million tonnes, which is in-line with guidance that was provided in mid-December.

“Coal is already being mined at Moorvale, but the sustained wet weather has slowed coal recovery at Coppabella,” managing director and chief executive Nicole Hollows said.

“Dewatering of the pits at both sites is underway and we are aiming to have coal recovery progressively return to normal over the next few weeks.”

Shares lower after weak overseas leads

The Australian sharemarket has opened lower today after weak leads from overseas, especially from the United States where the Federal Reserve has reiterated the weakness of the US economy once again.

The benchmark S&P/ASX200 index was down 14 points or 0.32% to 4727.5 at 12.20 AEST, while the Australian dollar maintained its position over parity but dipped to $US101.5c.

AMP shares lost 0.6% to $5.21 while Commonwealth Bank shares lost 0.7% to $50.11. NAB gained 0.1% to $23.86 as ANZ dropped 0.4% to $23.17.

Iron ore giant Fortescue Metals has appointed former Thiess chief executive of Australian operations Neville Power as its new chief operating officer.

“Our major project is Australia’s biggest single iron ore expansion, increasing Fortescue’s production to 155 million tonnes per annum, some 180% in a single step,” chief executive Andrew Forrest said in a statement.

As reported in the Australian Financial Review, Qantas will return its Airbus A380 fleet to the trans-pacific route from January 17.

“We are working towards resuming services to Los Angeles as soon as possible based on the advice from our engineering department and stakeholders, but we are not in position to make a comment yet,” a spokesperson told the publication.

Goldman Sachs counts down on Facebook deal

Investment banking giant Goldman Sachs has reportedly told its wealthy clients that it has a week to commit to a deal to invest in Facebook.

The report comes after separate reports yesterday said Facebook had taken a further $US500 million in funding from Goldman and Digital Sky Technologies, a previous investor.

As reported by Reuters, a Goldman customer has said that the company is taking a 4.5% fee from money invested into the fund, with a placement memorandum to be distributed tomorrow.

Meanwhile, the Federal Reserve has said the US economy is still weak and will remain so for some time.

“Even with the positive news received over the intimiting period, the most likely outcome was a gradual pick-up in growth with slow progress toward maximum employment,” the minutes of its latest meeting have read. “The recovery (remains) subject to some downside risks.”

On Wall Street, the Dow Jones Industrial Average gained 20.43 points or 0.18% to 11,691.18.


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