US markets move higher, March 7-11

The Dow Jones Industrial Average and the S&P 500 Index hit new highs for 2016 on the back of steady oil price gains (U.S. crude settled at US$38.50 per barrel and the International Energy Agency said the market may have hit its bottom); a new stimulus package from the European Central Bank; higher metal prices; and mounting appetite for risk. The Dow closed at 17,213.31 in a 1.2% gain, while the S&P 500 climbed 1.1% to 2,022.19. Spot gold finished at US$1,250.10 per oz., down 0.8%, or US$9.

Shares of troubled U.S. coal miner Peabody Energy were up US$3.16, or 93%, to US$6.55 per share. Bloomberg reported that money manager Franklin Resources is pressing the St. Louis-based miner to restructure its US$6.4-billion debt in court. According to the news agency, Franklin is one of the biggest holders of a US$1.2-billion term loan that Peabody has on its books, which is due in 2020. (By contrast, two other U.S. coal miners — Alpha Natural Resources and Arch Coal — have already filed for bankruptcy.)

Solid year-end results sent shares of Franco-Nevada up US$4.12 to US$61.38. The company reported on March 10 that its adjusted net income in 2015 reached US$88.9 million, or US57¢ per share, compared with US$137.5-million, or US91¢ per share, in 2014. The company invested over US$1 billion in 2015 and another US$500 million in early 2016. Last year Franco-Nevada declared dividends of US$129 million, its eighth straight year of increases.

Improving gold prices helped lift Barrick Gold up US23¢ per share to US$13.95. But the miner also announced news that it is being fined US$9.8 million in connection with the September 2015 spill of cyanide solution at its Veladero mine in Argentina. The fine is being imposed by the government of San Juan province. Barrick attributed the breach to “the failure of a valve on a pipe carrying cyanide solution at the leach pad, which led to a release of solution.” The Jachal Court of San Juan province says it will proceed with criminal charges against nine current and former Barrick employees in connection with the incident. “We recognize that we have disappointed many of our partners in San Juan province and we deeply regret this incident,” Barrick said in a news release on March 11.