Huge sell-off in U.S. equities, Apr. 29-May 6

U.S. equities posted heavy losses as commodities plunged and economic data showed weekly applications for unemployment insurance rose to an eight-month high. The Dow Jones Industrial Average dropped 171.8 points or 1.34% to close the Apr. 29-May 6 trading week at 12,638.74, while the S&P 500 slid 23.41 points or 1.72% to finish at 1,340.20. Just four companies on the New York Stock Exchange reached new 52-week highs, while one fell to a new 52-week low. The Philadelphia Gold and Silver index lost 20.03 points or 9.01% to 202.19.

Few were spared from the sharp sell-off. Shares of Alliance Resource Partners, a diversified coal producer, fell US$8.48 to US$72.99 per share, despite posting record first-quarter results the previous week. Increased coal sales volumes and record average realized pricing drove revenues to a record US$423.3 million, an increase of 11.2% compared to the quarter ended Mar. 31, 2010.

On the precious metals front, Allied Nevada tumbled US$8.71 to US$34.35 per share. Disappointing first-quarter results released on May 5 didn’t help. Net income totaled US$0.2 million (US$0.00 per share), compared with net income of US$3.7 million (US$0.05 per share) for the same period in 2010. Agnico-Eagle Mines lost US$6.93 to US$62.65 on no news, while Goldcorp was down US$6.91 to US$48.92. Goldcorp reported first quarter revenues jumped 69% over the 2010 first quarter, to US$1.2 billion, on gold sales of 627,300 ounces; operating cash flow increased 108% year-on-year to US$586 million or US$0.73 per share; and adjusted net earnings surged 150% to US$397 million or US$0.50 per share. Silver Wheaton dropped US$4.80 to US$35.82 per share, despite announcing its second quarterly cash dividend payment for 2011 of US$0.03 per share.

Meanwhile, with copper sinking to five-month lows during the trading week, Freeport McMoRan Copper & Gold was the fourth most actively traded stock and ended the week at US$50.17 per share, down US$4.85, on no news.

On the positive side, International Coal Group advanced 31% or US$3.42 to US$14.45 per share, following news May 2 that it had agreed to be bought by Arch Coal for US$3.4 billion. The combined company will be the second-largest U.S. metallurgical coal supplier and a top-five overall global coal producer and marketer. OM Group added US$0.75 or 2% to close the week at US$36.99 per share, after reporting net income was $30.7 million in the first quarter, or $1.00 per diluted share, compared with $22.6 million, or $0.74 per diluted share, during the year-ago period.