US markets post mixed results, Oct. 24-28

Real gross domestic product in the third quarter increased at a 2.9% annual rate, according to an advance estimate by the U.S. Bureau of Economic Analysis. Real GDP in the second quarter increased 1.4%. The second estimate for the third quarter based on more complete data will be released on Nov. 29. Concern over the outcome of the U.S. presidential elections and its impact on the larger economy continued to worry investors. The Dow Jones Industrial Average edged up 0.1% to 18,161.19, while the S&P 500 Index moved lower, down 0.7% to 2,126.41. The New York spot price for gold rose US$9 per oz. to finish at US$1,274.70 per oz., and the Philadelphia Gold & Silver Index fell 2.4% to 84.77. West Texas Intermediate crude oil closed at US$49 per barrel.

Shares of Rio Tinto jumped 5.1%, or US$1.66, to US$34.53. The miner signed a non-binding agreement to sell its entire stake in the giant Simandou iron ore project in Guinea to Chinalco. The agreement sets out the proposed terms of the sale with the goal of signing a binding agreement within six months. Rio Tinto would receive payments of US$1.1 to US$1.3 billion based on the timing of the project’s development. The initial payment for shares would start at the time of first commercial production, on a per-tonne basis.

Vale’s shares were the most traded, rising 10.2%, or US64¢, to US$6.90. The company reported net revenues in the third quarter of US$7.3 billion — up US$698 million from the second quarter — due to higher sales for iron ore fines and pellets (US$275 million), nickel and copper (US$95 million), and coal (US$25 million), along with higher sales volumes of fertilizers (US$142 million), and for its ferrous business segment (US$127 million). Net income totalled US$575 million, down from US$1.1 billion posted in the second quarter. The US$531-million decrease mostly came from foreign exchange rate variations (US$2.2 billion). Underlying earnings (after adjusting for one-off effects) were US$954 million, mainly after adjustments for foreign exchange variation (US$330 million).

Yamana Gold’s shares fell 10.5%, or US40¢, to US$3.42 as it posted US$464.3 million in quarterly revenue and a net loss of US$2.1 million.