U.S. equities remain in positive territory despite falling commodity prices, Apr. 8-12

U.S. equity indexes rose for four days in a row with the Dow Jones Industrial Average and the S&P 500 posting new closing highs on Thursday Apr. 11. Stocks were driven higher by several bright spots in the economy. The Labor Department reported that the number of initial claims for unemployment benefits the previous week had dropped 42,000 to a seasonally adjusted 346,000—the largest weekly drop since the middle of November, while U.S. home foreclosure filings were down 23% in March. The indexes gave back some of their gains on Friday, however, as commodity prices fell and the price of gold crashed through the psychological barrier of US$1,500 per oz. to end the trading week at US$1,482.40 per oz.—its lowest level since July 2011. Despite the tumbling gold price, the Dow Jones Industrial Average closed the week 2.10% higher at 14,865.06 while the S&P 500 notched a 2.30% gain to 1,588.85—the best weekly gain since the first week of the year.

Shares of Rio Tinto were up US$1.87 to US$47.59 despite news of the temporary closure of its Bingham Canyon copper mine in Utah after a slide on its northeastern pit wall. The Bingham Canyon mine accounted for about 1.3% of global copper mine production in 2012, according to BMO Capital Markets.

BHP Billiton climbed US$1.81 to US$69.07 per share. The company announced it had completed the sale of its stake in the Ekati diamond mine, Canada’s first diamond mine about 200 km south of the Arctic Circle, as well as its diamonds marketing operations, to Dominion Diamond (formerly Harry Winston Diamond Corp.) for a total of US$533 million.

Allied Nevada climbed 5.7% to US$13.17 per share after management updated shareholders on the expansion project at its Hycroft mine in Nevada. The company confirmed that its capital cost estimate for the project remains at US$1.24 billion, and that it has purchased or has fixed contracts in place for about US$720 million, or 58% of the total capital budget. The company believes that the remaining capital to be committed (US$523 million) is sufficient to complete the project, with start-up remaining on track for the first quarter of 2015. 

Tanking gold prices and news that construction on the Chilean side of Barrick Gold’s Pascua-Lama project had been suspended in response to environmental and regulatory concerns sent shares of the gold major down US$4.07 to US$22.62. Precious metal streaming company Silver Wheaton and royalty company Royal Gold, both suffered collateral damage, with their shares falling US$2.61 to US$26.46 and US$7.24 to US$60.47, respectively.