NZ stocks: Warehouse and Sky City results send NZ sharemarket lower

The Warehouse's shock announcement that it will only make $15 million at best in the second half sent its shares down 65 per cent in early trading.

Adding to the gloomy tone, Sky City's mere 4 per cent rise in its half year net profit to $55 million resulted in its stock being sold 3.6 per cent.

Sky City shares were down 16c at $430 at midday. It raised its dividend to 11 cents per share from 10.5c.

The Warehouse shot as low as $3.89 in early trading before recovering by noon to $4.06 -- down 26c on yesterday's close.

The discount retailer, "where everyone gets a bargain", has lost 26 per cent from $5.45 in just over a month as concerns about its margins and operations in Australia gathered momentum.

The benchmark NZSX-50 index fell 12.54 points to 2423.99, while the NZSX-40 capital index was down 10.90 points to 2233.61.

Goldman Sach JBWere broker Murray Rutherford said The Warehouse was very much the focus for the market and investors were trying to "bottom pick".

"I think the market and the company themselves are disappointed with progress in Australia".

Mr Rutherford said the company had been very resolute in the past in rectifying problems such as with a new computer and inventory system and achieving an appropriate level of profitability.

"But it's not a short fix. It's a big market that they're in and they have a lot of work to do, clearly by their own admission."

Asked whether the market felt the company should abandon its Australian operations, Mr Rutherford said: "That's a matter of opinion and certainly that's not the feeling you are getting from management."

The placement of 12.8 per cent of Freightways shares by ABN Amro to institutions was creating added pressure on the market as shares in other companies were sold to raise cash for the placement.

The stock was sold at $2.15 against yesterday's close of $2.26. It was trading down 4c on 222 today.

Total market turnover at noon was 26 million shares worth $63 million of which $33.8 million of that was in Freightways.

Telecom, which yesterday gained 6c, was down 1c to 566.

There were few other movements of note.

Software of Excellence rose 1c to 145 after the company said it had improved its bottom line.

Scott Technology fell 75c to 278, Fletcher Building fell 5c to 400, Hallenstein Glasson fell 6c to 284, and Ryman Healthcare fell 5c to 215.

There were only 20 stocks to rise of the 108 traded against 48 falls.

In the US, technology shares edged while blue chips ended nearly unchanged as mixed reports on the economy in January kept a lid on investor sentiment in a market that has lost steam in recent weeks.

The blue-chip Dow Jones industrial average declined 21.48 points or 0.20 per cent to end at 10,580.14, based on the latest available data. The tech-heavy Nasdaq composite index rose 9.60 points or 0.47 per cent to finish at 2,032.58, while the broad Standard & Poor's 500 eked out a gain of 1.25 points or 0.11 per cent to close at 1,144.92.

- NZPA