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ASX Thursday close: Much ado about nothing

After a flat day on Wall Street, it promised to be a rather dull trading session here on the ASX.

And we weren’t disappointed.

The S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) closed down a paltry 7 points to 4429. Not to be outdone, the All Ordinaries (Index: ^AORD) (ASX: XAO) fell an uninspiring 10 points to 4495.

The Aussie dollar at one stage dropped below $US1.03 on weaker-than-expected Chinese data.

Perhaps former federal opposition leader John Hewson will get his way after all. He says the RBA should continue slashing interest rates so they are in line with other developed economies, saying it would be better if the cash rate was as low as 2%. That would do some damage to the Aussie dollar, but breathe some life into our ailing economy.

But don’t hold your breath.

US Markets were soft overnight, with the Dow Jones Industrial Average falling 0.1% to 13,268.6 and the S&P 500 down 0.25% to 1,402.3 points. Only the Nasdaq managed to close ahead, rising 0.3% to 3,059.9.

Traders are seemingly reluctant to jump into the market at the moment, pending US non-farm payrolls report due on Friday and an auction of three and five year Spanish bonds later tonight.

What happened to all the excitement about the 50 basis point cut in interest rates? Perhaps investors realised, in the long-term,  it doesn’t really change anything.

As ever, despite the market being flat on the day, we had our usual selection of winners and losers.

In the black was Westpac (ASX: WBC) after reporting results slightly ahead of expectations. Dividend-seeking investors — and let’s face it, who doesn’t like a dividend? — were skipping all the way to their local branch, the interim dividend up 2 cents to 82 cents.

Commonwealth Bank of Australia (ASX: CBA) did their best to trump Westpac, announcing it was cutting its standard variable interest rate by 40 basis points. National Australia Bank (ASX: NAB) remains the sector’s whipping buy this month, only lopping 32 basis points of its rate. Westpac and ANZ (ASX: ANZ) are yet to move. The tension is almost unbearable.

Harvey Norman‘s (ASX: HVN) 3rd quarter 2012 sales fell 8.1%. Australian sales were the major drag, dropping a rip snorting 9.2 percent. Third quarter profit before tax fell even harder, down 44 percent to $42 million. That brings PBT to $205 million in the last nine months. Shares closed down 1.5% to $2.04, up from the day’s low of $1.97.

No surprises then that fellow retailers David Jones (ASX: DJS) and JB Hi-Fi (ASX: JBH) also took it on the chin, falling similar amounts.

Who’d be a retailer?

Woolworths (ASX: WOW)…that’s who. Their shares rose 1.6%, perhaps as Australia’s millions of savers cycled out of term deposits and into high dividend shares? QBE Insurance (ASX: QBE) rode the wave too, which is more than can be said of Billabong International (ASX: BBG) — they saw another 2.3% wiped off their market capitalisation.

Befitting a flat day on the markets, BHP Billiton (ASX: ASX) closed at exactly the same price it opened — $36.25. The chart below shows the day’s movements in all their technicolour glory.

Source: Yahoo Finance

Fellow mining giant Rio Tinto (ASX: RIO) spoilt the party, falling 1.1%. The AFR ran a front page story saying soaring costs are forcing the company to review its coal expansion plans. Surely it’s only a matter of days before Clive Palmer announces he’ll take them off Rio’s hands? Stranger things have happened. Titanic II, for example?

And finally, ASX Limited (ASX: ASX) has reported a 2.7% fall in underlying net profit and Iress Market Technology (ASX: IRE) reported segment profit growth of just 2.9%.

Iress said short term growth prospects look weak, but “in due course operating conditions will turn…providing a sound basis for medium term growth.” The market was having none of it however, sending the shares down 5.3%.

One important outcome from this week’s rates decision is that bank deposits continue to be less and less attractive for investors seeking income. We think that’s where shares can play an important, but often overlooked role.

To find out why, and see which shares we think fit the bill, look no further than “Secure Your Future with 3 Rock-Solid Dividend Stocks”. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

For more Foolish reading, check out these stories we published yesterday:

The Motley Fool‘s purpose is to help the world invest, better.  Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. Bruce Jackson has an interest in CBA, WBC, ANZ, NAB, BHP and WOW. This article contains general investment advice only (under AFSL 400691).

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