Wall Street stocks down sharply, Jan. 4-8

The opening week of 2016 marked the worst first week in history for Wall Street stocks, as oil prices fell to their lowest level in more than a decade and concerns about slowing growth in China spooked global markets. Manufacturing data in China in December also contributed to a 10% decline in the Shanghai Composite Index and a 14% drop in the Shenzhen Composite Index — triggering a circuit breaker in the system. The Dow Jones Industrial Average fell 6.2% to 16,346.45 and the S&P 500 Index dropped 5.96% to 1,922.03. Spot gold rose 4.1% to finish at US$1,104.60 per oz., while the Philadelphia Gold & Silver Index climbed 3.97% to 47.10.

Higher gold prices lifted many boats, with Agnico Eagle Mines posting the largest jump, gaining US$3.28 to US$29.56 per share. Other beneficiaries included: Franco-Nevada (up US$3.08 to US$48.83); Randgold Resources (up US$1.85 to US$63.78); and Barrick Gold (up US$1.04 to US$8.42). None of the companies reported any corporate news during the session.

Royal Gold also posted a gain, rising US$1.35 to US$37.59 per share. The company announced on Jan. 6 that it had sold 61,500 oz. gold related to its streaming agreements in its fiscal 2016 second quarter ended Dec. 31, 2015. The sales were made at an average realized gold price of US$1,094 per oz. and at an average cost of sales of US$370 per stream ounce.

With copper and oil prices at multi-year lows (copper finished at just over US$2 per lb., while West Texas Intermediate crude closed at US$32.92 per barrel), shares of Freeport-McMoRan fell US$1.36 to US$5.41 on no company-related news. Freeport’s shares were also the most traded. In December, the company suspended its annual dividend and cut capital expenses in its oil and gas division to US$1.8 billion in 2016 and US$1.2 billion in 2017. In its mining division, it has declared a 25% reduction in capital spending for 2016 (from US$2.7 billion to US$2 billion, including $0.6 billion in sustaining capital), and curtailments at its mines in North and South America totalling 250 million lb. copper and 20 million lb. molybdenum per year. Freeport also plans to shut down its Sierrita mine in Arizona and adjust operating plans at its molybdenum mines.