U. S. MARKETS APRIL 1-7

While the April 1-7 trading period was, overall, a good one for U. S. markets, news that minutes from a Federal Reserve meeting predicted a deepening and protracted economic downturn in the country were beginning to take their toll at presstime.

U. S. markets had been enjoying healthy runs until the news was released on April 8, with the Dow Jones Industrials gaining roughly 350 points to finish at 12,612.43, the NASDAQ Composite gaining 85 points to 2,364.83 and the S&P 500 Index managing to tack on 50 points to 1,372.54.

Contributing to a bearish mood was news from Alcoa — the world’s third-largest aluminum company. Alcoa announced disappointing first-quarter profits, blaming higher energy costs, lower metals prices and a slumping U. S. dollar for the drastic cut in earnings. The factors combined to slash net income by half — to US$303 million from US$662 million for the same period last year. The news sent Alcoa shares down US26 to US$37.18 on 16.5 million shares traded on April

8. The company was the period’s second most actively traded and had gained US$1.38 over the week period before the poor financial results were announced.

On the other end of the mineral colour wheel, word that coal miner and energy producer Massey Energy was accelerating its expansion plans, helped lift the company 32% higher to US$48.17. Massey said it would spend another US$90 million to bring its total budget to US$310 million for the expansion of its coal mining operations in Central Appalachia this year. The company said all of its future capital spending will be funded by cash generated from expanded operations.

Word of the expansion is connected to the company’s belief that the prices for the metallurgical coal it mines will be much higher than previously forecasted.

Rio Tinto also enjoyed a healthy boost to its share price, gaining US$44.46 to finish the period at US$456.30. The diversified global mining giant announced that it was accelerating a prefeasibility study for the expansion of the Alma smelter in the Saguenay-Lac- Saint-Jean region of Quebec. The expansion will add roughly 170,000 tonnes to production, which currently is at 400,000 tonnes.