Warehouse falls on quiet day for market

An "extraordinarily quiet" day on the New Zealand sharemarket saw small gains in the major stocks, but a 14-cent drop in The Warehouse shares after the big red retailer announced disappointing trading results for Christmas.

The Warehouse shares closed at 407, down 3.33 per cent today, after this morning's announcement of Christmas trading results. But the results shouldn't have come as a surprise, Paul Robertshaw, Tower Asset Management's head of New Zealand equities, said.

"They've certainly not seen, through the last six months, the recovery in sales that a number of the discretionary retailers have seen.

"It's a good core solid business, but that they are struggling to grow profits doesn't surprise me."

The Warehouse's results seemed "reasonably isolated", he said.

"I do get the feeling Christmas wasn't massive this year, but it wasn't dire, either, across the sector."

In major stocks, Telecom has had a good run from its recent low and Fletcher Building had a "lot of supportive lead indicators", he said.

Telecom closed up 7c at 257, Fletcher Building up 3c to 802 and Contact up 9c to 624.

Sky City moved nearly 4 per cent, gaining 13c to 343, though this was due to intra-day volatility and traders repositioning their stocks, rather than any specific news or announcement , Mr Robertshaw said.

"It's extraordinarily quiet - that's why we get such big movements. There's a lot of people on holiday, a lot of people not doing much on their portfolios, lots of management teams not available for comment. It's just portfolio flows, rather than fundamentals driving it," he said.

Overall, the NZSX-50 index closed up 1.178 per cent, or 38.043 points, at 3268.188.

Auckland Airport gained 4c to 206, Sky TV gained 8c to 513, Fisher & Paykel Appliances gained 4c to 62, and Tower gained 7c to 207. Port of Tauranga gained 5c to 710 and Restaurant Brands gained 1c to 169.

Cavalier fell 13c to 265, Rakon fell 3c to 113, NZ Refining fell 9c to 366, Fisher & Paykel Healthcare fell 6c to 331 and Sanford fell 2c to 475.

There were 44 rises and 24 falls among the 110 stocks traded.

Overall, the market started 2010 in the same vein as it ended 2009. The benchmark NZSX-50 index ended 2009 around 3230 points, 19 per cent higher than where it finished 2008. It has been trending upwards since mid-December and is now near the 13-month high around 3257 points reached last October.

In the United States, stocks rallied in the first trading session of 2010, as investors bet that the economic recovery would be sustained following upbeat data on the manufacturing sector.

Both the S&P 500 and the Dow hit their highest closes in 15 months, while the Nasdaq hit its highest close in 16 months. The Dow Jones industrial average closed up 1.5 per cent at 10,583.96, the Standard & Poor's 500 Index shot up 1.6 per cent to 1132.98, and the Nasdaq Composite Index jumped 1.7 per cent to 2308.42.

- NZPA