US Markets

U.S. equities rallied late in the trading week as markets anticipated that Spain would ask eurozone deputy finance ministers for a bailout for its troubled banks, which it did over the weekend. The Dow Jones Industrial Average and the S&P 500 posted their biggest percentage weekly gains since December, with the Dow rising 3.6%, or 435.6 points to 12,554.20, and the S&P 500 advancing 3.7%, or 47.6 points to 1,325.7. The Philadelphia Gold and Silver Index barely budged, slipping from 162.71 points to 162.10 in a 0.4% drop.

Royal Gold topped the week’s list of value gains with a US$4.36 bounce to US$79.11 per share on no news, underscoring that markets seem to favour gold royalty companies, which fund projects in return for a portion of revenues over traditional gold miners, whose share prices so far this year have generally failed to keep pace with advances in the gold price.

On the fertilizer front, shares of Agrium climbed US$3.95 to US$79.49 per share on news that its board of directors had approved a US$0.275-per-share increase to its semi-annual dividend declared on May 11. The dividend will be US50¢ per share and paid to shareholders of record on July 12. The company’s CEO Mike Wilson said the increase highlighted Agrium’s earnings outlook for retail and wholesale operations.

Alpha Natural Resources was the third most actively traded stock, sinking US$1.11 per share to close at US$9.32 after the company announced it would discontinue mining at four of its mines and two idle coal-preparation plants in Kentucky, while scaling back production at several other mines. It is also shutting down four of its contract mines. Declining demand for thermal coal — mostly due to the mild winter — and a wave of electric utilities that are switching from thermal coal to cheaper natural gas were primary factors in the decision. In its most recent quarterly earnings announcement, the company said future sales would be hit by regulatory actions on clean air by the U.S. Environmental Protection Agency. Production cuts could result in 150 lost jobs and reduce shipments of thermal coal by 2 million tons in 2012 and by 4 million tons next year. The company expects the measures could result in savings between US$50 million and US$60 million a year.

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