U.S. equities extend winning streak, Jan. 21-25

The S&P 500 finished the week at 1,502.96 — the first time since Dec. 10, 2007, that the benchmark index closed above 1,500 points. For the week, the S&P climbed 1.1%, while the Dow Jones Industrial Average advanced 1.8% to finish at 13,895. U.S. equities have rallied in January due to better-than-expected corporate earnings, some encouraging signs in the U.S. housing and labor markets, and a more positive mood in Washington.  The Philadelphia Gold and Silver index dropped 6.52% or 10.5 points to end the week at 150.82.

Agrium advanced US$6.93 to US$114.63 per share. The fertilizer giant announced on Jan. 24 that it expects its 2012 fourth-quarter earnings to be slightly above US$2.00 per diluted share, up from its previous guidance of US$1.50 to US$1.90 per share for the quarter.  It also believes its retail business unit will generate over US$120 million of earnings before interest, taxes, depreciation and amortization, or EBITDA, in 2012, while it expects its wholesale business will generate fourth quarter EBITDA of more than US$500 million. President and chief executive Mike Wilson said the improved financial outlook was due to a “very strong finish to the fall application season in our North American retail operations, supported by an extended fall season in the U.S. and continued strength in grain and oilseed prices.”

Molycorp Inc. was the most actively traded stock of the week with news it would sell up to US$225 million of common stock at US$6 per share in addition to up to US$150 million of senior unsecured convertible notes bearing 5.5% interest and converting at an initial price of US$7.20 per share. (If overallotments are exercised in both cases, the numbers rise to about US$259 million and US$172.5 million, respectively.) Molycorp has said it needs about US$430 million for capital expenditures and for cash requirements in 2013, including completing Phase II at its Mountain Pass facility. The company ended 2012 with a cash balance of about US$200 million. Molycorp shares traded US$0.86 lower to end the week at US$8 per share.

Fourth-quarter results sent shares of Freeport McMoRan Copper & Gold up US$1.23 to US$34.87. The company reported net income attributable to common stock of US$743 million or US$0.78 per share, up from US$640 million or US$0.67 per share in the year-ago quarter. (Net income for all of 2012 reached US$3.0 billion or US$3.19 per share, down from US$4.6 billion or US$4.78 per share in 2011.) Consolidated sales in 2012 totaled 3.65 billion pounds of copper, 1.0 million ounces of gold and 83 million pounds of molybdenum, compared with 3.7 billion pounds of copper, 1.4 million ounces of gold and 79 million pounds of molybdenum in 2011.