Volatility hits US stocks, Oct. 13-17

U.S. equities ended the choppy trading week in negative territory. The Dow Jones Industrial Average fell 164 points to 16,380.41, despite a late partial recovery that snapped a six-day losing streak on the back of strong earnings reports. 

The S&P 500 Index slid 19 points to 1,886.76, while the tech-heavy Nasdaq Composite Index gave back 18 points to close at 4,258.44. The spot price for gold jumped US$15.20 per oz. to US$1,238.20.

Arch Coal was one of the week’s top winners, jumping 31% to US$1.97 after reporting selected preliminary results for the third quarter. Arch expects improved adjusted earnings before interest, taxes, depreciation, depletion and amortization of $70 million to $74 million, up from $65 million in the previous quarter. It ended September with $1.1 billion in cash and short-term investments — up nearly $60 million from the June quarter. Total liquidity was $1.3 billion compared to $1.3 billion at the end of June. Arch expects 2014 metallurgical coal and thermal coal sales of 6.3 million to 6.9 million tons and 124 million to 130 million tons.

Shares in Banro jumped 25% to US17¢ after the gold producer said it was closing a US$121-million financing with Dubai-based private investment firm Gold Holding. The financing consists of two gold-stream arrangements, where Banro will receive US$41 million from selling 40,000 oz. from the Twangiza mine and another US$80 million for 10% of the life-of-mine production from the Namoya mine. Both assets are in the Democratic Republic of the Congo. Banro will use the proceeds to improve its balance sheet and bring Namoya to full production.

North American Palladium was the worst performer, dropping 22% to US14¢, after reaching a 52-week low of US13.4¢ on Oct. 15. A day later, the firm published the third-quarter drilling results from its 2014 Lac des Îles exploration program, where it drilled 3,800 metres in 22 completed holes and 4 holes that are still in progress. Highlights include promising results from the ongoing extension and conversion program targeting the Lower, North and Upper parts of the Offset zone.

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