Dow Jones closed down 120. Two days of 100+ point falls have followed a two day 448 point rise. It was down 128 points at its low and up 54 at its best. The main issue a weak GDP number (but in line with expectations) and financial weakness. Final GDP for Q4 07 +0.6% after 4.9% growth in the previous quarter.

Financials down 2.0% on rumours about Lehman Brothers' solvency, the fourth largest US investment bank. Lehman fell 8.9% on concerns they were going to make an announcement suggesting they were having a similar "run on the bank" to Bear Stearns.

The company said "There are a lot of rumors in the marketplace that are totally unfounded. We are suspicious that the rumors are being promulgated by short sellers of our stock that have an economic self interest". After Fed action in the financial markets the Lehman Bros CEO recently said "from my perspective, takes the liquidity issue for the entire industry off the table". Investors fleeing Schwab Bond Fund which ranked bottom of its category, having been over-exposed to corporate and non-agency mortgage bonds. Metals had a good night.


Both BHP and RIO down in ADR form overnight, 0.15% and 0.20% respectively. BHP down 63c to 4080c. Metals all up – Copper up 3.8%, Nickel up 5.1% and Zinc 3.1%. Aluminium up 2.8%. Zinifex down 8c to 991c.

Oil price up $1.73 to $107.56 after an Iraqi oil pipeline was bombed. The newswires said exports from southern Iraqi terminals have been cut to 1.2m barrels a day compared to the usual 1.56m as a result. Woodside down 4c to 5343c.

Gold down 40c to $948.80. Newcrest up 75c to 3410c. US Bonds down with the 10 year yield up to 3.55% from 3.46%.