US stocks up on QE3, Sept. 10-14 week

U.S. stocks gained for a second consecutive week, pushing the Standard & Poor’s 500 Index up to the highest level since December 2007, as the U.S. Federal Reserve unleashed a third round of quantitative easing, or QE3, to prop up the economy.

During the Sept. 10-14 trading week the Fed said it would purchase US$40 billion of mortgage debt a month until the U.S. labour market recovers, pushing the S&P 500 up 27.85 points or 1.9% to 1,465.77. The Dow Jones Industrial Average added 286.73 or 2.2% to 13,593.37, while the Nasdaq Composite Index gained 47.53 or 1.5% at 3,183.95. 

Unlike the two previous monetary efforts, undertaken in 2008 and 2010, QE3 is open-ended and would remain in place until there is a noticeable improvement in the labour market. The unemployment rate in the U.S. fell to 8.1% in August, from 8.3% in July, only because more people stopped looking for a job. 

Following the QE3 news, the spot price of gold soared to US$1,770.50, adding US$35.20 per oz. This helped the Philadelphia Gold and Silver Index advance 12.69 points to 191.87.

Randgold Resources topped the value gains, climbing US$8.87 per share to $120.34. On Sept. 13 the producer held an open day at its jointly held Kibali gold project in the Democratic Republic of the Congo, updating attendees on the mine’s development and relocation plan, which involves relocating 14 villages to Kokiza, a new model town.

The project is envisioned as an underground and open-pit operation feeding a twin-circuit sulphide and oxide plant with a throughput of 6 million tonnes per year. Kibali, which has more than 10 million oz. gold in reserves, should start production in late 2013.

Randgold and AngloGold Ashanti each hold 45% of Kibali, while the Congolese government owns the rest. 

Leading global aluminum producer Alcoa was one of the heaviest traded stocks with over 127 million shares changing hands as it reported receiving several accolades. It was among the top technology innovators across America, one of the 50 most engaged workplaces in the country, and was listed on the Dow Jones Sustainability indexes for the eleventh consecutive year, just to name a few. Alcoa finished at US$9.84, up US74¢.

Texas-based Uranium Resources closed its takeover of Neutron Energy, and completed a US$5-million financing with Resource Capital Fund, which lifted its shares up 23% to US63¢. Resource Capital has so far invested US$35 million in Uranium Resources, by providing US$20 million to retire most of Neutron’s debt, and a further US$15 million in funds. Resource Capital owns 28.1% of Uranium Resources.