U.S. equities end in positive territory, Apr. 16-20

A strong start to earnings season in the U.S. and a pledge of US$430 billion in new funding to the International Monetary Fund from the Group of 20 that will allow the IMF to help bail out European countries from the Euro debt crisis, lifted U.S. equities in the Apr. 16-20 trading week. The Dow Jones Industrial Average reversed two straight weeks of decline with a gain of 1.40% or 179.67 points to 13,029.26. The S&P 500 index edged up 0.60% or 8.27 points to close at 1,378.53, while the Philadelphia Gold and Silver index slipped 2.10% or 3.52 points to 164.12.

Shares of BHP Billiton gained US$3.17 to US$63.11 on news it will acquire five exploration tenements near its giant Olympic Dam copper-gold-uranium mine in southern Australia from Minotaur Exploration. BHP is paying US$10.3 million for the tenements in the Roxby Downs area of the Gawler Craton. The craton is a geological domain recognized for the occurrence of several large, high-quality iron oxide copper-gold-uranium deposits such as Olympic Dam, Carrapateena and Prominent Hill.

Rio Tinto advanced US$2.24 to US$57.12 after it unveiled a comprehensive financing package for Ivanhoe Mines that will ensure the continued development of the Oyu Tolgoi copper-gold project in Mongolia. The financing package along with the proceeds from any potential future asset sales by Ivanhoe are intended to cover Ivanhoe’s total funding needs to complete Oyu Tolgoi. On top of the US$1.8 billion interim funding facility that was agreed to in December 2010, Rio Tinto will support a US$1.8 billion equity financing by Ivanhoe and provide US$1.5 billion in bridge financing. Once project financing is in place, both the US$1.5 billion of bridge financing and the US$1.8 billion interim funding facility will be repaid to Rio Tinto. Ivanhoe also agreed that Rio Tinto, which owns 51% of the company, can replace a number of directors on its board and also nominate a new management team. Shares of Ivanhoe Mines closed the week at US$12.78 per share, down US$0.01.

First-quarter earnings for Peabody Energy beat expectations sending shares of the coal producer up US$1.42 to US$29.80. Although earnings in the first quarter were down 2.2% or 63¢ a share year-on-year at US$172.7 million due to acquisition-related charges and bad weather, the company reported higher prices from its Australian operations. The company also promised to reduce coal production this year in the U.S. due to mild weather and weaker demand from utilities, which are switching from coal to cheaper natural gas.