U.S. equities suffer worst week of year, May 14-18

Wall Street suffered its worst week this year with the Dow Jones Industrial index shedding 451.22 points or 3.52% to finish at 12,369.38 and the S&P 500 index shrinking 58.17 points or 4.30% to close at 1,295.22. The Nasdaq Composite dropped 155.03 points or 5.28% to 2,778.79, while the Philadelphia Gold and Silver index lost 3.49 points or 2.36% to close at 151.25. Despite some encouraging signs on the domestic economic front (an improvement in home builder sentiment coupled with rising housing starts and industrial production in the month of April), the Greek imbroglio and the dawning realization that the country will likely exit the Euro zone after new elections in June, kept investors on the sidelines. Concern about China’s slowing economic growth, the less-than-impressive debut of Facebook shares and mounting estimates of losses at JP Morgan also contributed to the decaying sentiment.   

The biggest value gain of the week—80¢ a share—went to AngloGold Ashanti after the typically reticent billionaire hedge-fund manager John Paulson said he liked the stock at the annual Ira Sohn conference in New York on May 16.  A day earlier, the gold producer disclosed that its chief executive officer Mark Cutifani and chief financial officer Srinivasan Venkatakrishnan exercised 86,293 and 70,375 share options respectively and applied all of the after-tax proceeds, net of costs, to acquire 51,692 and 42,157 ordinary shares respectively in their own names. Shares of AngloGold Ashanti ended the week at US$34.28 apiece.

With the New York spot price of gold climbing by US$12 per oz. to end the trading week at US$1,592.10 per oz., shares of New Gold, Newmont Mining, Yamana Gold, Banro Corp. and Barrick Gold all rose slightly on no news.

America West Resources posted the largest percentage jump of the week, rising 35.8% to close at 11¢ per share, on no news.  Its subsidiary Hidden Splendor Resources operates the Horizon coal mine, in Carbon County, Utah. The coal mine, which produces steam coal used by power plants, averaged 280,000 tons of coal a year over the last four years as a one-section mine, according to the company’s website. But management believes as a multiple-section mine Horizon could generate between 600,000 and 2 million tons per year.  

Cornerstone Capital Resources enjoyed the second-highest percentage gain of the week, rising 4.9% to close at 9¢ per share after announcing it had received authorization from the Ministry of Non-Renewable Natural Resources to resume exploration activities at its early stage Bella Maria porphyry gold-copper project in southern Ecuador.