Fears about Egypt and Middle East contagion weigh on U.S. equities

While earnings continued to come in better-than-expected during the Jan. 24-28 trading week, worries that Egyptian unrest may spread across the Middle East sent many stock indexes falling. The Dow Jones Industrial Average fell 48.14 points or 0.41% to close at 11,823.70, while the S&P 500 index rose 179.01 points or 1.35% to finish at 13,437.58. The Philadelphia Gold and Silver index lost 0.41 point or 0.21% to 199.71. Just four companies on the New York Stock Exchange reached new 52-week highs, while none fell to new 52 week lows.

Potash Corporation of Saskatchewan topped the list of value gains with an advance of US$9.91 to US$174.16 per share following news that it had doubled its fourth-quarter profit and also has plans to increase its dividend and split its stock. Potash Corporation of Saskatchewan earned $482.3 million in the fourth quarter, or $1.61 per diluted share, up from $239.2 million or 79¢ per diluted share in the same quarter a year ago. (The company noted that its fight against BHP Billiton’s hostile $40 billion takeover bid had shaved16¢ per share from its fourth-quarter earnings.) Potash Corp. expects demand for crop nutrients from Latin America, China and India will boost its potash shipments in 2011 to as much as 9.5 million to 10 million tonnes. Mosaic also performed well, adding US$6.58 to close at US$79.78 per share on lingering uncertainty about the impact Cargill Inc.’s decision to divest its shares in the company will have on the fertilizer giant.

Coal stocks outperformed most others. Massey Energy advanced US$4.52 to US$57.23 per share and Alpha Natural Resources gained US$2.66 to US$57.88. The two companies announced plans to merge a day after markets closed Jan. 28. The proposed business combination would create a company with more than 110 mines and coal reserves of about 5 billion tons, including one of the largest, highest-quality metallurgical coal reserve bases in the world. Peabody Energy, meanwhile, climbed US$2.92 to US$61.09 per share. The company posted the second-best earnings in its history with full-year 2010 earnings before interest, taxes, depreciation and amortization of US$1.82 billion, a 41% increase over prior-year levels. Income from continuing operations rose 76% to US$805.1 million and the company set a new record for revenues: US$6.86 billion on sales of US245.9 million tons.

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