The U.S. Congress may have passed President George Bush’s US$168-billion economic rescue package of rebates and tax breaks last week, but the announcement did little to ease fears on Wall Street. The Dow Jones Industrial Average fell 25.12 points to close at 12,240.01 during the Feb. 5-11 trading period, while the Standard & Poor’s 500 Index inched up just 2.49 points to close at 1,339.13.
Sixty-one percent of the U.S. public believes the economy is now suffering through its first recession since 2001, according to an Associated Press-Ipsos poll released on Feb. 10. And many analysts warn that there likely will be more bad news to come in the credit markets that will further upset equities markets and the broader economy.
So what did it all mean for the mining sector? The iron ore market still looks hot. The most actively traded stock, yet again, was Brazilian iron ore giant Vale, with more than 120.9 million shares changing hands. Its stock closed at US$31.91, up US60. Cleveland-Cliffs, the largest producer of iron ore pellets in North America, posted the greatest share increase, jumping US$12.57 to US$116.29.
The ongoing saga between BHP Billiton and Rio Tinto heated up during the trading session, with BHP making a formal bid for Rio in a new all-share offer of 3.4 shares for each Rio Tinto share — up from a 3-for- 1 proposal announced late last year. Rio’s board squashed the offer the same day, arguing the proposal did not fully reflect the company’s value. Shares of both companies tanked during the session: Rio Tinto shares crashed US$20.16 to US$412.00 and BHP stock dropped US$6.64 to US$65.84.
In the precious metals sector, the price of gold closed at US$922.20 per oz. on Feb. 11, up from its Feb. 5 close of US$886.60. The Amex Gold Bugs Index rose 20.53 points to
445.57, while the Philadelphia Gold and Silver Index climbed 8.86 points to close at 182.08. Minas Buenaventura jumped US$4.48 to US$69.34, Agnico-Eagle Mines increased US$3.84 to US$64.25 and Randgold Resources rose US$2.76 to US$46.95.
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