Storm takes wind out of U.S. markets, Oct. 29-Nov.2

U.S. markets were closed for an historic two-day period during the Oct. 29-Nov. 2 trading week, as one of the most damaging storms ever to strike the U.S. northeast left more than one hundred people dead. When the markets re-opened, they initially posted gains on news that employers had added 171,000 people to their non-farm payrolls in October, but slipped again in the uncertainty ahead of the Nov. 6 U.S. presidential election. The Dow Jones Industrial Average fell 14.05 points or 0.12% to 13,093.16, while the S&P 500 posted a slight uptick, with a 2.26 point or 0.16% gain to 1,414.20. The Philadelphia Gold and Silver index lost 3.76 points or 2.06% to close at 178.96.

NovaCopper posted the greatest percentage jump of the week, rising 10.8% to US$2.55 per share on the back of positive drill results from the South Reef Zone on its Bornite concession. Bornite is one of three volcanogenic-massive sulphide deposits that make up the company’s Upper Kobubk project in Alaska. Notable intercepts included 8.2 metres grading 7.91% copper; 5.3 metres of 4.08% copper; 17.5 metres of 5.10% copper and 31.2 metres of 6.96% copper.

Rio Tinto climbed US$1.16 to US$51.12 per share on no news but ahead of its Nov. 5 announcement that Oyu Tolgoi has signed a binding agreement with a Chinese power company for the supply of electricity. The agreement means the company is on track to bring the first phase of the copper and gold mine into production in the first half of 2013. Rio Tinto and its partners have invested almost US$6 billion in the project and completed it within 28 months.

Alpha Natural Resources was the most actively traded stock, ending the week 35¢ higher at US$9.06 per share. On Nov. 2, the leading U.S. coal producer reported a third quarter loss of US$46 million or US$0.21 per diluted share, compared with net income of US$63 million or US$0.28 per diluted share in the year-earlier quarter. In September, the company announced a plan to cut its annualized production rate by an additional 16 million tons, about 50% of which will come from the Powder River Basin, where it plans to adjust production to match currently committed and priced volumes for 2013. “These actions are being taken in a pricing environment where we estimate that the majority of U.S. thermal coal would be uneconomic to produce at today’s spot market prices,” Kevin Crutchfield, Alpha’s chairman and chief executive, said in a statement accompanying the quarterly results. “Similarly, metallurgical coal has fallen to levels at which a significant percentage of worldwide supply is uneconomic.”