Shares lower, key NAB executive resigns, US job losses surge: Economy roundup

The Australian sharemarket has opened lower today after more poor news out of the United States. The Dow Jones Industrial Average fell 1.19% overnight on concerns that more US banks may have to be nationalised as part of attempts to bailout the economy.

Investors were also spooked by another poor set of employment figures.

Data revealed the number of workers on unemployment benefits has risen to a record high in the first week of February, increasing by 170,000 to 4.99 million. The US Department of Labor says it is the highest reading since 1967.

In Australia, the benchmark S&P/ASX200 index was down 44.9 points or 1.3% to 3404 at 12.15 AESDT. The dollar gained ground to US64 cents.

Westpac shares lost 1.9% to $16.68, Commonwealth Bank dropped 1.4% to $29.43 and NAB fell 1.7% to $18.08.

NAB executive departs

NAB executive director Ahmed Fahour has left the bank. Fahour will cease to be on the board and the NAB group executive committee effective from today.

“Ahmed has transformed the NAB’s business in the Australian region. He initiated and carried out a program of change which has been of great benefit to all stakeholders,” chairman Michael Chaney said in a statement.

Fahour is yet to announce his future plans

Billabong’s battles

Shares in surf wear maker and retailer Billabong fell 5.9% to $6.17 after the company recorded a 7.1% fall in first half profit to just $82.4 million. But the company says earnings per share should be up 10% for the full financial year based on the current exchange rate.

“The half year result was built on a strong overall performance in Europe, a steady outcome in Australasia and higher sales growth at lower margins in the Americas as the economic downturn took hold and consumer spending declined.”

Financial stress on the rise

Meanwhile a new study has revealed nearly 20% of all Australians feel some sort of financial stress.

The survey by the Menzies Centre for Health Policy at the University of Sydney of 1200 adults was taken mid-2008, when respondents were asked how they were dealing with high interest rates and higher energy bills. About 8% say they felt “high financial stress” while 11% said they were experiencing “some” difficulties meeting everyday expenses.

James Gillespie from the Menzies Centre told AAP that the study is even more applicable now. “The measure of financial stress covered those just beginning to face problems in meeting their household budget as well as the long term poor.

“Since the fieldwork was completed economic conditions have declined sharply, and the health problems associated with financial stress could only have become worse.”