U.S. equities stabilize in Oct. 3-7 trading week

Policy moves in Europe and better jobs data in the U.S. helped stabilize equity markets. The Bank of England launched a second round of quantitative easing with a pledge to buy 75 billion pounds (US$115 billion) of assets with new money, while the European Union vowed to come up with a coordinated plan to recapitalize the banks. Unemployment remains at about 9.1%, but the U.S. Labour Department said employers added 103,000 jobs in September and revised its August figures up from zero to 57,000 new jobs. Improved prospects sent the Dow Jones Industrial Average up 1.74% to 11,103.12 points, while the S&P 500 index climbed 2.13% to finish at 1,155.46. The Philadelphia Gold and Silver index advanced1.32% to 187.44.

Ivanhoe Mines jumped 18.6% or US$2.55 to close at US$16.25 per share after it reassured shareholders that its management along with Rio Tinto and the Mongolian government had concluded discussions and “reaffirmed their continued support for the [Oyu Tolgoi] Investment Agreement and its implementation.” Late last month a group of lawmakers urged the government to revise the terms of the IA to make the deal more favourable to Mongolia.

Cliffs Natural Resources gained US$4.70 to close at US$55.87 per share on no news. Late last month the iron ore giant announced plans to sell its “renewaFUEL” biomass production facility in Michigan. The facility was built to produce high-energy, low-emission biofuel cubes from sustainably collected wood and agricultural feed stocks but since initial production “has not performed to design capacity, nor at a production level that justifies continued operation,” the company said. “While we believe the renewaFUEL business model remains viable, the business is likely to have better prospects with a company more experienced in the area of biofuels that can develop renewaFUEL to its full potential,” explained David Blake, a senior vice president at the company.  

Despite copper prices hitting a 14-month low during the trading week and fears of shrinking demand from China, shares of the world’s largest publicly traded copper company rose US$3.56 to US$34.01 per share. Freeport-McMoRan Copper & Gold declared a quarterly cash dividend on Sept. 29 of 25¢ per share payable Nov. 1. Shares of Teck Resources climbed US$3.24 to US$32.43 per share on no news. On Sept. 30 the diversified miner announced that its Highland Valley Copper operation and the United Steelworkers of America had reached a tentative collective agreement.