U.S. markets fall sharply, July 28-Aug. 1

Argentina’s second debt default in 13 years — combined with more fighting in the Ukraine and Gaza, and uncertainty over Federal Reserve policy — pushed U.S. equity markets into negative territory. The S&P 500 suffered its biggest weekly loss since June 2012, plunging 2.7% to 1,925.15. The Dow Jones Industrial Average fell 2.8% to 16,493.37, and the Philadelphia Gold and Silver Index lost 2.1% to close the week at 99.49.

Shares of Cliffs Natural Resources jumped US$1.26, or 7.8%, to US$17.36 per share after activist hedge fund Casablanca Capital elected six of its nominees to the board of directors. New York-based Casablanca owns a 5.2% stake in Cliffs and had waged a six-month battle for control of the board. Next it will remove the company’s current CEO. Cliffs recorded a net loss attributable to common shareholders of US$2 million, or US1¢ per diluted share, compared with net income of US$133 million, or US82¢ per diluted share, in the second quarter of 2013.

News that Alderon Iron Ore had signed a second offtake agreement for iron ore from its 75%-owned Kami project in the Labrador Trough sent its shares up 7.4% to US$1.28. A subsidiary of Glencore will buy 40% of the iron-ore concentrate produced at Kami, up to a maximum of 3.2 million tonnes. The agreement will stay in place until Glencore receives 48 million tonnes of concentrate, which is expected to be in the project’s fifteenth year of production. Alderon’s first offtake agreement is with Hebei Iron and Steel Group Co., its 25% partner at Kami and China’s largest steelmaker. Hebei has the right to buy 60% of Kami’s annual production, and owns nearly 20% of Alderon’s shares.

Newmont Mining gained US5¢ to US$25.20. The company announced plans to invest US$1 billion in its Merian gold project in Suriname, with production expected to start in late 2016. In a release, Newmont said its divestment of nearly US$800 million in non-core assets would help fund the next generation of lower-cost projects in its portfolio. Newmont also reported adjusted earnings of US$101 million, or US20¢ per share, in the second quarter. Before adjustments, its earnings were US$182 million, or US37¢ per share.

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