S&P 500was down by 9.54 points or 0.51% to 1867.63 on Tuesday. U.S. stocks fell after the Standard & Poor’s 500 Index climbed to a record last week, as commodity shares slumped with copper and oil prices falling on concern over China’s economy. Copper prices on the London Metal Exchange hit their lowest level since July 2010 under pressure from rising inventories of the metal and slow demand. Copper and Iron ore are tumbling due to worries about slowing demand in China, the world's biggest buyer of the two commodities, but the recent fall in the Yuan is also adding to the sell-off. The decline in the Chinese currency hits companies that use imported copper and iron ore as collateral for loans, as credit from traditional channels has dried up in China. This sort of funding is increasingly risky for both borrowers and lenders, adding to the stresses on the slowing economy.

Job openings  in the U.S. increased less than expected in January, a sign labor-market cooling from late 2013 persisted as severe winter weather hammered the eastern and Midwestern U.S. The number of positions waiting to be filled increased by 60,000 to 3.97 million, from a revised 3.91 million the prior month. German shares rose on Tuesday, outperforming European stocks more broadly, as strong trade data from the region's largest economy revived investor appetite for the DAX index.


S&P 500 Daily Chart   (Source – Thomson Reuters)

S&P ASX 200 was up 2.3 points or 0.04% and closed at 5413.80 points on Tuesday. The Australian dollar has fallen sharply in the last several hours as commodities, which initially edged higher, resumed their recent slide. Copper is now at its lowest level in more than three years, while West Texas Intermediate crude oil has dropped to a three-week low. Qantas Airways has forecast rival Virgin Australia Holdings will add 4.6 per cent capacity in the domestic market in the second half, outpacing its own plans to boost capacity by 3 to 4 per cent.

Paul Zahra has agreed to stay on as chief executive of David Jones, setting the stage for a showdown between himself and Myer Holdings chief Bernie Brookes if a $3 billion merger proposal proceeds. BHP Billiton's president of iron ore Jimmy Wilson says the global miner plans to sell its West African iron ore assets.



S&P ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:-

Code	Name	Price	Change	%Change
RRL	REGIS RESOURCES LIMITED	$2.55	$0.07	2.82%
AAD	ARDENT LEISURE GROUP	$2.49	$0.06	2.47%
WDC	WESTFIELD GROUP	$10.44	$0.24	2.35%
BWP	BWP TRUST	$2.36	$0.05	2.16%
QBE	QBE INSURANCE GROUP LIMITED	$12.87	$0.25	1.98%
SKT	SKY NETWORK TELEVISION LIMITED.	$5.97	$0.11	1.88%

 Stock of the Day – carsales.com.au (CRZ)
Carsales.com.au is Australia’s leading online portal to access the largest pool of buyers and sellers of motor vehicles. Established through the first mover advantage it was able to build up a sizeable audience through the network effect. Despite efforts to derail the popularity of the Carsales website by larger, better capitalized companies such as News Corporation and Fairfax, Carsales continues to be dominant site of choice by consumers. Its site records three times the combined page impressions of all its major competitors.

Carsales delivered a 10% increase in the first half fiscal 2014 revenue to AUD 112.3 million and an uplift net profit after tax or NPAT of 17% to AUD 44 million. The strong migration of advertising revenue online accounts for the solid increase in comparable revenue which we anticipate continuing during the next five years. The increase in profit margin reflects the inherent operating leverage with extra marginal revenue falling through to profit.



Source - carsales.com.au 
 
A carsales owned website captures 80% of all time spent by consumers looking at automotive classifieds websites within Australia. Dealer revenue increased 11% to AUD 50 Million and contributed the largest component of group operating revenue at 44%. Carsales obtains a lead fee when consumers click through to obtain the dealers contact information on a particular vehicle.



CRZ Daily Chart  (Source - Thomson Reuters)
 
During the first half fiscal 2014 growth in dealer revenue was driven by an increase in price combined with an increase in volume growth used car inventory but was partially offset by volume declines in new car leads. Private revenue which incorporates direct placement advertising increased by 7% to AUD 18.3 million and contributes just 16% of group operating revenue. We like the carsales story but find the stock too expensive at its current price and would review the stock at a later date.

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