U.S. markets gather steam, July 18-22

As debate in the U.S. Congress over raising the government’s US$14.3 trillion debt ceiling continued to make markets uneasy during the July 18-22 trading week, there was some good news across the Atlantic, where Eurozone countries and the International Monetary Fund agreed to give Greece a second bailout package and ease fears of contagion. The Dow Jones Industrial Average climbed 201.43 points or 1.6% to close at 12,681.16, the S&P 500 index advanced 28.8 points or 2.2% to 1,345.02, and the Nasdaq Composite gained 69.03 points or 2.5% to finish at 2,858.83. Uncertainty continued to spur safe-haven buying of precious metals and the Philadelphia Gold and Silver index jumped 3.41 points or 1.6% to 220.36. The price of gold closed the week at US$1,600.30 per oz.

Stellar fourth-quarter net earnings of US$649 million or US$1.45 per diluted share, up from US$396 million or US$0.89 per diluted share in the year-earlier quarter, explained the jump in Mosaic‘s share price. The fertilizer giant’s shares were the fifth most actively traded of the week, rising US$6.13 to close at US$72.88 apiece. Mosaic’s net sales in the fourth quarter of fiscal 2011 were US$2.9 billion, a 54% increase from US$1.9 billion in the same period last year. Fourth quarter operating earnings were US$825 million, compared to US$548 million a year ago. Agrium gained US$3.18 to US$92.56 per share while Potash Corporation of Saskatchewan added US$2.44 to US$61.64, both on no news.

Alliance Resource Partners, a diversified coal producer and marketer with significant operations in the eastern U.S., added US$3.92 to US$79.45 per share on no news, while Consol Energy, the largest underground coal producer in the U.S., was up US$2.48 to US$54.82. Arch Coal gained US$2.11 to US$28.61.

On the precious metals front, Randgold Resources climbedUS$2.63 to US$90.63 per share, on no news, while Allied Nevada Gold advanced US$2.23 to US$40.96. On July 19 Allied Nevada released drill results from its wholly owned Hasbrouck project where recent assay results indicate the discovery of two new zones of higher grade gold and silver mineralization east of its Saddle Zone. Discovery of the Franco Zone included 97 metres of 2.3 grams gold per tonne and 34 grams silver per tonne. The Hasbrouck property is about 80 km south of the Round Mountain open-pit mine, a joint venture between Kinross Gold and Barrick Gold.