U.S. stocks retreat further, June 20-24

The Dow Jones Industrial Average and the S&P 500 Index fell for their seventh week in the last eight as mounting anxiety about Euro-zone debt continued to eat away at investor confidence. The Dow Jones Industrial Average fell 69.78 points or 0.58% to finish at 11,934.58 during the June 20-24 trading week, while the S&P 500 Index lost 3.05 points or 0.24% to 1,268.45. The Philadelphia Gold and Silver index inched up 1.77 points or 0.93% to close at 191.89.

Cliffs Natural Resources, which produces iron ore pellets, lump and fines iron ore, and metallurgical coal products, topped the list of value gains with an advance of US$5.11 to US$86.62, despite receiving some troubling news at the end of the week. On June 24 the company announced that federal regulators had denied its remediation plan to address carbon monoxide issues at its Pinnacle mine in West Virginia. Cliffs says it is now evaluating its options. The company had planned to produce over one million tons of low-volatile metallurgical coal from the mine in the last six months of 2011.

Shares of Patriot Coal and Peabody Energy, meanwhile, got a lift from a positive report on the outlook for the coal sector by Goldman Sachs. Peabody Energy climbed US$3.17 to US$57.04, while Patriot Coal rose US$2.27 to US$21.25. Among its arguments Goldman noted that high oil prices make coal a cheaper alternative for power generation and other uses. Goldman also made the point that as countries like Germany turn away from nuclear power, coal could benefit.

Teck shares were up US$1.88 to US$46.49 per share. On June 19 Teck updated its coal guidance for the second quarter, noting that due to the February earthquake and tsunami in Japan, some of its coal customers had deferred shipments because of reduced steel production requirements. Teck said it now expects coal sales in the second quarter “at the low end of its previously announced guidance range of 5.5 to 6.0 million tonnes.” It also said that unit mining costs are expected in the $71-$76 per tonne range for the full year, largely due to “one-time costs related to labour settlements and higher than expected costs for items such as external mining contractors and diesel.” On June 22 the company announced that it had received regulatory approval for a share buy-back program.

AngloGold Ashanti‘s stock continued to take a beating due in part to ongoing silicosis-related compensation issues. Shares of Africa’s biggest gold miner were down US$1.98 to US$40.12.