U.S. equities strong in the Nov. 1-5 trading week

Gold, commodities, and equities surged after the U.S. Federal Reserve announced on Nov. 3 that it will buy US$600 billion in government bonds to help buoy the economy. The U.S. central bank will purchase about US$75 billion in longer-term Treasury bonds per month through the end of June 2011. Concerns about the greenback and inflation pushed gold prices to within a few dollars of US$1,400 per oz. before closing in New York on Nov. 5 at US$1,394.10 per oz. Gold gained 2.52% or US$34.30 per oz. over the Nov. 1-5 trading week. The Dow Jones Industrial Average advanced 2.93% or 325.59 points to close at 11,444.08 points, while the S&P 500 index jumped 3.60% or 42.59 points to 1,225.85.

Twenty-six companies on the New York Stock Exchange reached new 52-week highs. Freeport McMoRan Copper & Gold was one of them, topping the week’s list of value gains with an advance of US$10.05 per share to US$104.84. The world’s largest publicly traded copper company was also the third most-actively traded stock of the week, on no news. In late October, the Democratic Republic of the Congo government completed its review of Freeport’s Tenke Fungurume copper-cobalt project and confirmed that its contracts are in good standing.

Silver Wheaton was another company that reached a new 52-week high. With silver prices tracking gold prices — and reaching a 30-year high of US$26.89 per oz. — during the Nov. 1-5 trading week, Silver Wheaton shares jumped US$4.20 to finish at US$32.95 per share.

Potash Corporation of Saskatchewan, the second most-actively traded stock of the week, tumbled US$4.03 per share to close at US$141.06 following the Government of Canada’s rejection of BHP Billiton’s US$39 billion hostile takeover of the company. Industry Minister Tony Clement said the deal did not represent a net benefit to Canada but left open the possibility of an improved bid from BHP, saying a final decision would not be made for another 30 days. By contrast, BHP Billiton shares closed higher at US$92.14 per share, an increase of US$9.56 per share, the second-largest value gain of the Nov. 1-5 trading week.

Taseko Mines took a hammering after the Canadian Government blocked the company from developing an open-pit mine at its Prosperity project in central British Columbia. The federal ruling, citing “concerns about significant adverse environmental effects,” overruled the provincial government’s support for the $815-million project. Taseko shares lost US$1.64 to close the week at US$4.67 apiece.