US markets rise over Oct 3-7 session

The Dow Jones Industrial Average rose 571.28 points or 1.99% to 29,296.79 and the S&P 500 gained 55.04 points or 1.51% over the Oct. 3-7 trading week to finish at 3,639.66.  

Vale added US$1.10 to US$14.42, though down from the week’s high of US$15.19 per share, after the world’s largest nickel and iron ore producer said it would reorganize its Brazilian base metals operations to be more efficient. The company’s copper assets in the country are to be transferred to Salobo Metais and its nickel assets are to be part of a new company Vale is to set up. Vale said it will continue to wholly own all the assets. It also said it has retained advisors “to assess alternatives to unlock long-term value to its shareholders,” which could mean potential asset sales.  

Shares in Freeport-McMoran, the world’s second-largest copper producer, gained US$1.62 to close the week at US$28.95 apiece. Some investors note the stock is attractive because the company invests its free cash flow in dividends and copper demand remains high despite the impact of inflation on producing the mineral. Investors may find the stock undervalued when the average 12-month price target issued over the past three months is US$36.75, according to Nasdaq Analyst Research.  

Shares in Cleveland-Cliffs, North America’s largest flat-rolled steel producer, rose US$1.36 to US$14.83 after General Motors and Ford reported better-than-expected production figures. Cleveland-Cliffs supplies more steel to the automotive industry than any other steelmaker. The sector is rebounding as computer chip supply shortages ease and demand remains strong for vehicles. The company is also benefiting after signing a union employee contract, and competitor U.S. Steel cut production. U.S. Steel also gained over the week on the vehicle industry news, adding 69¢ to close at US$18.81.  

Shares in Newmont, the world’s largest gold producer, rose US57¢ to US$42.60 apiece as gold companies benefited from a weaker U.S. dollar during the period making it more affordable for investors to buy gold using other currencies. The OPEC+ cut in oil production due in November that was announced during the week, and widespread acceptance among economists of a looming recession brought on by higher interest rates to tackle inflation is pushing more investors into gold as a safe haven. Newmont also said its chief financial officer, Nancy Buese, is resigning and being replaced on an interim basis by controller and chief accounting officer Brian Tabolt.  

Gold Fields and Yamana Gold, soon to be merged in a US$6.7-billion deal, followed the gold trend higher, adding US48¢ to US$8.57 and US31¢ to US$4.84 per share, respectively. Barrick Gold and Kinross Gold each shed 2¢ to US$15.48 and US$3.74 per share, respectively.