US markets bounce back over July 5-9

Markets in the United States recovered somewhat during the July 5-9 trading period amidst positive news about global economic growth this year and next.

The International Monetary Fund is now forecasting 4.5% growth in 2010 and 4.25% in 2011 but noted that there is also a rising risk environment with sovereign debt issues that has the potential change everything. Investor’s are also anxiously awaiting second quarter earnings reports, which are about to start coming out.

The Dow Jones Industrial average increased 4.8%, or 465.8 points, to 10,198.03 points over the week while the S&P 500 rose 4.2% to 1070.50 points and the Nasdaq gained 3.1% to close at 2,176.29 points.

News of potential economic growth was good for the big base metals miners, who dominated as the top value gainers over the period.

Freeport McMoRan Copper and Gold was one of the top gainers by value, rising US$7.59 per share to US$93 apiece. It was also one of the most actively traded shares with 51.4 million shares changing hands.

Aluminum maker Alcoa was the volume leader by far with a volume of 92.7 million shares with the stock up about 9% to US$10.94 apiece.

BHP Billiton Plc shares rose US$5.13 apiece to US$67.84 while BHP Billiton Ltd. shares rose US$4.23 to US$56.38. On July 12, BHP put out news that its Olympic dam project in on track for a final decision for expansion by 2011 after newspaper reported the project may be delayed. The company wants to more than triple annual copper production capacity to 73,000 tonnes and more than quadruple uranium production capacity to 19,000 tonnes over 11 years at Olympic Dam.

The big three fertilizer companies Agrium, Potash Corp of Saskatchewan and Mosaic also saw their shares make significant upward gains with Agrium up nearly 18%, or US$8.86, to US$58.17, Potash Corp. up US$7.59 to US$93 piece and Mosaic rising almost 17%, or US$6.7, to US$46.13 per share. Mosaic completed a US$485 million deal with Vale for a joint venture on a phosphate rock mine in the Bayovar region of Peru.

Agrium completed the acquisition of 24 retail farm centres in Argentina from DuPont Crop Protection. This doubles Agrium’s retail presence in Argentina and should add revenue of US$57 million per year. The company also bought a crop protection formulation facility in Casilda, Argentina, which produces herbicides, insecticides and fungicides for the domestic market.