Iluka shares smashed, ASX down 1%

This is not the time to put your head in the sand

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published July 9, 2012 5:32 pm AEST

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) has fallen 1% to close at 4,118.3, taking its lead from US markets and adding its own view. US economic data out on Friday suggested that the US recovery was stagnating.

Locally, job advertisements on the internet and major newspapers fell 1.2% according to the ANZ job advertisements survey out today. This follows a 2.6% drop in May, which may mean that employers are holding off on new hirings until there's greater certainty in the market.

The Australian dollar was flat, trading around 101.8 US cents.

Company News

Iluka Resources Ltd (ASX: ILU) shares fell 24% to close at $8.88 after the company advised the market of falling sales and an uncertain outlook. The company also stated that it was no longer able to provide longer-term forecasts, partly due to moving to short term sales contracts.

Leighton Holdings (ASX: LEI) announced that the company had sold its Thiess Waste Management Division to Germany's Remondis for $218m. The sale will generate a pre-tax capital gain of approximately $115m, and cash proceeds will be used to reduce the company's debt.

Lend Lease Group (ASX: LLC) will make an $80m profit from the sale of land which will hold two office towers at Barangaroo, a new development on Sydney's foreshore. The company has sold the land to a new $2 billion property trust, managed by, guess who? No not Macquarie, but Lend Lease. According to CEO Steve McCann the company would take a profit on the sale of the land, on the construction margin, on completion of the towers, and then on the sale of its stake. (It's good to be a property developer!)

IGA Supermarkets, supplied by Metcash Limited (ASX: MTS) has announced a $5m six week advertising campaign and cut some prices by as much as 25%, as it tries to compete with Coles – owned by Wesfarmers Limited (ASX: WES) and Woolworths Limited (ASX: WOW).

Winners and Losers

Miners led the market down, with Newcrest Mining Limited (ASX: NCM) falling 2.7% to $23.44, while Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) lost 2.2% and 1.9% respectively.

Perennial yo-yo Linc Energy Limited (ASX: LNC) fell 8.8% to 67.5 cents on absolutely no news.

Telstra Limited (ASX: TLS) was one of the few majors advancing, adding 4 cents, or 1.1% to close at $3.78.

Foolish takeaway

Yet another day of doom and gloom in the market place. If this continues, we may yet be able to buy some quality businesses like Cochlear and Woolies on the cheap. Keep the faith, Fools!

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Motley Fool writer/analyst Mike King owns shares in Cochlear, Leightons, Woolworths and BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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