U.S markets

U.S. markets were in positive territory before closing for the Independence Day holiday, but moved downward after disappointing jobs data showed non-farm payrolls added 80,000 jobs in June for the third month in a row that employment grew by less than 100,000 jobs. The Dow Jones Industrial Average ended the week down 107.62 points at 12,772.47, and the S&P 500 Index lost 7.48 points to finish at 1,354.68.

Shares of Patriot Coal closed the week 97¢, or 79.5% higher at US$2.19 per share — just days before the company announced that it was filing for chapter-11 bankruptcy protection as it struggles with lower demand and prices for coal, along with rising costs. Milder winters, cheaper natural gas prices and stricter emission controls have also taken a toll on the coal sector.

Statistics from the Energy Information Administration demonstrate that demand for U.S. coal in the first quarter was the lowest for the period since 1988. Patriot has obtained a commitment for US$802 million of debtor-in-possession financing from a number of banks to support its reorganization process. The performance of other coal companies was mixed, however, with shares of Alliance Resource Partners up US$3.98 to US$60.10 per share, and Peabody Energy and Arch Coal also in positive territory with gains of 34¢ to US$24.86 and 26¢ to US$7.15, respectively. By contrast, Walter Energy fell a hefty US$3.04 to US$41.12 and Alpha Natural Resources was down 4¢ to US$8.67.  

Political developments in Argentina hammered the shares of miners there, with Pan American Silver down US$1.08 to US$15.80 per share after the government of Chubut proposed higher taxes and royalties in a new draft mining law that the mining company said would make its Navidad silver project uneconomic. Argentina’s central bank declared on July 5 that people would no longer be able to buy U.S. dollars for the purpose of saving themin an effort to safeguard foreign reserves. And a day earlier President Cristina Fernandez announced that private banks would have to lend cheaply to businesses at rates below inflation to help support the economy.

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