US equities gain momentum during Aug. 30-Sept. 30 trading week

The U.S. unemployment rate in August increased a tenth of a percentage point to 9.6%, but a bigger-than-expected rise of 67,000 in private payrolls moderated the gloom somewhat during the Aug. 30-Sept. 3 trading period. President Barack Obama ruled out a second stimulus package for the economy, but said he was reviewing new measures to assist the economy, including further tax cuts for businesses to help create new jobs, an extension of tax cuts for the middle class, rebuilding U.S infrastructure, and hiking investments in clean energy and research and development. The news helped buoy U.S. equities. The Dow Jones Industrial Average gained 296.68 points or 2.9% to finish the Aug. 30-Sept. 3 trading period at 10,447.33, while the S&P 500 index advanced 3.8% or 39.92 points to finish at 1,104.51.

The New York spot price for gold rose US$8.50 to US$1,246.60 per oz. on Sept. 3, while the Philadelphia Gold and Silver index advanced 2.7 points or 1.5% to 186.81. Freeport McMoRan Copper and Gold scored the largest jump in value and was the third most actively traded stock, on no news, rising US$7.35 per share to close the trading week at US$78.55. Gains by other gold companies were far more modest, with Newmont Mining adding US$1.07 to US$60.87 and Kinross Gold inching up 96¢ to US$17.43 per share. On the losing side of the ledger, were Barrick Gold, down US$1.20 to US$45.30, Goldcorp, US$1.50 lower at US$42.84, and Eldorado Gold, which lost 53¢ to close the week at US$19.10. On Sept. 3, Goldcorp and Eldorado both announced offers for Andean Resources, eager to get their hands on Andean’s Cerro Negro gold project, in Argentina’s southern province of Santa Cruz. Eldorado announced an all-share bid valuing Andean at $3.4 billion, while Goldcorp offered shares and cash worth $3.6 billion. (Eldorado later withdrew its offer on Sept. 7, stating that while its proposal reflected full value for Cerro Negro, the project was a “good to have” asset, not a “need to have” asset.)

On other fronts, Potash Corporation of Saskatchewan closed the week up 77¢ at US$148.50. The Canadian potash producer has been in the limelight since Aug. 18, when BHP Billiton announced a US$130 per share all-cash takeover bid for the company. BHP Billiton‘s shares closed the week up US$3.43 at US$70.80 per share.