U.S. markets gain during Aug. 4-8 trading week

The Dow Jones Industrial Average gained 957.58 points or 2.92%, to 33,761.05, and the S&P 500 climbed 134.96 points or 0.77% over the week to 4,280.15.

The trading week’s top gainer in value was Arch Resources, whose shares are in high demand as the global energy crisis deepens on the back of Russia’s war on Ukraine. The miner reported late last month record net income, leading to the declaration of massive dividends on top of a healthy share repurchase program. The war in Ukraine threatens to trim Russian coking coal export levels, particularly once the EU’s ban on Russian coal imports takes effect in a few weeks. Elsewhere, U.S. and Canadian export levels are up only modestly year-to-date, despite extreme pricing levels through the year’s first half. The company said another potential support mechanism for the global coking coal market is a still strong international thermal market.

Hudbay Minerals was the week’s top percentage gainer, adding 23.9% to close at US$4.56 per share. The company reported a second-quarter net income of US$32.1 million, or US12¢ per share, after posting a loss in the same period a year earlier. The base metals minerreported portfolio-wide operating success, reporting higher production than in the first quarter at significantly reduced cash costs. The company has recently released the results of the preliminary economic assessment of the Copper World complex in Arizona, which entails a two-phase mine plan with an after-tax net present value (10%) of US$1.3 billion and would generate an 18% internal rate of return at US$3.50 per lb. copper. It is also advancing a pre-feasibility study for the first phase of development at Copper World, which will focus on upgrading  remaining inferred resources  and evaluating several of the project optimization and upside opportunities.

Another coal company counted among the top value gainers during the trading week was CONSOL Energy, which added US$7.47 to close at US$69.35 per share. CONSOL is in an excellent spot to benefit as it produces both metallurgical and utility coal for domestic and international customers. The global coal bull market remains in a good spot as prices and demand are expected to remain high with more upside risks tied to geopolitical developments. The company recorded an exceptional quarter, prompting it to roll out an enhanced shareholder return program, which will become effective in the third quarter and initially return about 35% of free cash flow generation to shareholders via dividends and/or share repurchases. To jump-start the program, CONSOL announced on Aug. 8 that it would pay a US$1 per share special dividend on Aug. 24.