NZ Shares: Early tumble on local market

Telecom shares were down 7c in early trading to $2.75 after the company reported its third quarter results.

The figures showed a 14 per cent rise in the company's third quarter net profit to $159m, while revenue lifted 1 per cent to $1.4 billion.

Retailer The Warehouse slipped 3c early to $3.72 after reporting third quarter sales down 2.8 per cent on the corresponding period last year to $383.5 million.

Their declines came in a tumbling market, with the benchmark NZX-50 index down 29.97 points, or 1.1 per cent, to 2824.9 around 10.25am, having risen 23.5 points yesterday.

Today's sharp early fall comes after United States stocks slid as investors took profits from the technology sector's recent surge, while analyst downgrades hurt telecoms and a tepid response to a US government bond auction raised fears about public finances.

Investors worried that poor demand for government debt could raise the cost of capital and hamper chances of a US economic recovery.

"The auction is big news because now it's showing that maybe the Chinese don't want our bonds. If the cost of capital for the United States becomes more expensive, then the recession is going to take that much longer to get out of," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

Shares falling early in this country included Fletcher Building down 12c to $6.72, Fisher & Paykel Healthcare down 7c to $3.10, Sky City down 6c to $2.87, and Hellaby Holdings down 3c to 62.

Early risers included Pike River Coal up 3c to 94, Rakon up 3c to $1.55, and Tower up 3c to $1.57. NZX gained 12c to $7.85 on low volume.

In the US, the Dow Jones industrial average dropped 1.2 per cent to 8409.85, the Standard & Poor's 500 Index slid 1.3 per cent to 907.39, and the Nasdaq Composite Index fell 2.4 per cent to 1716.24.

- NZPA