Market closes higher

Contact Energy shares closed higher even after the company reported a 50.4 per cent fall in annual profit, as investors continue to bet companies will be able to move on from a hard year.

An unchanged final dividend of 17c per share helped improve sentiment for Contact but managing director David Baldwin warned a range of potential factors could make it difficult to maintain it in future.

Contact's shares were down 19c early to 610, but closed up 6c at 635.

The benchmark NZX-50 index closed up 22.411 points, or 0.716 per cent, at 3151.259. Turnover was worth $140.42 million, of which $50m was in Fletcher Building.

There were 67 rises and 27 falls among the 125 stocks traded.

Nigel Scott of ABN Amro Craigs said the market had performed solidly this week based on continuing rallies in equity markets around the world.

Evidence is mounting that the New Zealand economy is turning around and investors are looking for companies with strong balance sheets and low costs.

Steel & Tube, which reported yesterday, had "knocked off" a lot of debt, he said. The stock rose 10c to 320 today.

Consultancy Opus, which reported this week, rose 3c to 135 on the belief that cost cutting has positioned it well.

But it was not all one way.

Pyne Gould Corp fell 14c to 127 after the credit rating of the company's finance company Marac was cut yesterday by Standard & Poor's.

Telecom, which reports next Friday, fell 5c to 275. Sanford fell 3c to 525 on a day the NZ dollar rose through US68c before retreating slightly.

NZ Refining rose 5c to 698, Pike River Coal rose 1c to 120 and TrustPower rose 3c to 758.

GPG rose 1c to 81 after releasing an update which said shareholders may have a longer wait for signalled returns.

Nuplex continued a run, rising 11c to 240. Rakon rose 5c to 147 on the day of its annual meeting.

Retailers continues to perform well with The Warehouse up 10c to 410, Hallenstein Glassons up 6c at 290, and Pumpkin Patch up 6c at 190.

Ryman rose 3c to 195 and Fisher and Paykel Appliances rose 1c to 85.

Fletcher Building rose another 8c to 798, continuing its strong run this week after reporting a huge loss.

"Companies are lean and mean and positioned for any uptick," Mr Scott said.

"There is cautious optimism emerging from the companies," he said.

Next week is a big one for the New Zealand corporate reporting season.

In the United States, stocks rose as better-than-expected earnings by Wal-Mart Stores helped offset disappointing government numbers on retail sales and jobs.

US retail sales fell 0.1 per cent in July, defying market expectations of a gain, while the number of workers filing initial applications for unemployment benefits rose by 4000 to a seasonally adjusted 558,000 after economists had anticipated a drop.

The Dow Jones industrial average rose 0.4 per cent to 9398.19, the Standard & Poor's 500 Index gained 0.7 per cent to 1012.73, and the Nasdaq Composite Index added 0.5 per cent to 2009.35.

- NZPA