NZ stocks: Warehouse fall after result feature of quiet sharemarket

A sharpish fall by The Warehouse after its result was the main feature on an exceptionally quiet sharemarket today.

The overall market drifted lower following a sharp dump on Wall Street.

US stocks tumbled, knocking major stock gauges dangerously near 2-1/2-year lows set in April, after signs of slack economic activity and a rash of grim earnings forecasts dimmed hopes for a recovery in corporate profits.

The US National Association of Purchasing Management (NAPM) set the bleak tone early in the day.

Its key gauge of service-sector activity dropped to a new four-year low in August, suggesting major portions of the economy shrunk four of the past five months as the economic slowdown grinds on.

The Nasdaq Composite Index spiralled down 53.37 points, or 3.03 per cent, to end at 1705.64 and the blue-chip Dow tumbled 192.43 points, or 1.92 per cent, to 9840.84. sliding back below the important 10,000 mark.

Here, the NZSE-40 index dropped below 2000. Shortly after 11am it was down 14.80 points to 1988.49. Turnover was just over $20 million.

Discount retailer The Warehouse fell 13c to 585 after reporting July year net profit of $60.8 million, slightly lower than the $63 million forecast.

Salomon Smith Barney broker Craig Robins said The Warehouse's results in its main trading operations were in line with forecasts. One-offs such as the write-off its e-business venture had dragged the bottom line down.

He said indications were that August sales had been quite strong and the forward outlook was positive.

Air NZ shares continued their disastrous nosedive today.

The freely tradeable B shares fell 7c to 83c at their opening but later recovered to be 5c down from yesterday at 85c, while the New Zealand residents only A shares fell 4c to 72c and recovered to 73c. The lows were record bottoms for both stocks.

Mr Robins said uncertainty would prevail over Air NZ until the Government made an announcement on the carrier's future ownership next week.

Market leader Telecom slipped 2c to 478 under pressure from European telecos. Marconi bonds in Britain descended to the status of junk after Standard & Poor's further downgraded the stock.

Other movers included Sky City, down 12c to 1140, Sky TV down 2c to 352, Carter Holt Harvey, down 2c to 170, AMP, down 9c to 2310, and Lion Nathan down 5c to 545.

There were only 10 rises to 66 falls among the 112 stocks traded.

- NZPA