U.S. Markets move sideways for March 18-22 period

U.S. Markets were recovering at press time after a sluggish March 18-22 period. The dominant theme over the last week was troubled European nation of Cyprus, as the period ended with the fear that the island country would not be bailed out by the European Union and that contagion would ensue.

Such worries had the Dow Jones Industrial average down 2 points to 14,512.03 points and the S&P 500 down 4 points to 1,556.89. The NASDAQ, however, managed to make gains as the Index was up 30 points to 3,245 points.

Another key feature of the period was the release of a monetary policy statement from the Federal Reserve. The Fed said its monetary easing will be continued through bond buying and that the program would only end when there is a sustained recovery in the labor market.

Stronger economic data from the U.S. had some believing the Fed would stop buying bonds sooner, which had been leading investors to buy the U.S. dollar and sell off gold. The idea that the loose monetary policies that have fuelled gold’s strong run over the last four years could be coming to a close in the near future caused a slump in the gold price leading into the Feds statements but prices rallied somewhat afterwards.

That rise in the price of the yellow metal returned some of the luster to companies that mine it as Randgold Resources, Royal Gold, Newmont Mining, Agnico-Eagle Mines and Goldcorp were among the highest gainers by value within the U.S. market mining sector.

The senior diversified miners fared less well as BHP Billiton, Rio Tinto, Teck Resources and Cliffs Natural Resources were among the biggest losers by value.

Shares of Alcoa were also off after a negative research from UBS AG was released. The bank dropped their earnings per share estimates on shares after Macquarie downgraded shares of Alcoa to underperform from a neutral rating. The company’s shares were off 18¢ to $8.45 for the period. In its last financial results, which were released on January 8 it met the consensus estimate of US$0.06 earnings per share for the quarter on revenue of US$5.9 billion.

Freeport McMorRan received the opposite type of attention, as a Goldman Sach’s recently issued an upgrade of the company’s stock to buy from Neutral and raised its price target to $42 per share. Goldman based the upgrade on its bullish view on copper and the Freeport’s strong exposure to the commodity. Goldman also wrote that it didn’t believe the company’s US$20 billion deal for oil and gas producer Plains Exploration won’t close and that the recent sell-off of Freeport’s shares has been overdone.