U.S. markets, Apr. 15 – 19

U.S. stocks kicked off the trading week by posting their worst day since Nov. 7, 2012, with the Boston Marathon bombings, lower-than-expected Chinese gross domestic product growth and a tumbling gold price accelerating equity sell-offs . On April 18 the S&P 500 ended below its 50-day moving average at 1,543.04 points for the first time in 2013, and for the full week dropped 2.12% to 1,555.25 points, its worst percentage loss since November. The Dow Jones Industrial Average fell 2.14% to 14,547.51, and the Philadelphia Gold and Silver Index lost 11.58% to close at 102.89.

Shares of Walter Energy plunged 27.4%, or US$6.62, to close at US$17.49 per share during the period. The coal producer’s board is fighting a British hedge fund’s attempts to nominate five new members to the board. In February, Audley Capital said that following Walter Energy’s acquisition of Western Coal Corp. in late 2010, the company has “consistently failed to deliver shareholder value as a result of questionable financial decisions and poor management.” On April 15, independent proxy voting advisory service ISS recommended that shareholders vote for all of Walter Energy’s nominees. Glass, Lewis & Co., another proxy voting advisory service, endorsed the company’s candidates on April 12.

BHP Billiton shares fell US$4.88 to US$64.19 per share. On April 18, the company’s new chief executive Andrew Mackenzie announced a revamped senior management team, which BMO Capital Markets analyst Tony Robson said “resulted in some surprising departures, as well as partially stripping out a layer of management that allows the major divisional heads to report directly to the CEO,” and that “the moves have resulted in the loss of experienced executives from BHP, but perhaps allows for renewed focus and a greater emphasis on cost-cutting by the new divisional heads.” The analyst also speculated that appointing Timothy Cutt as the new head of petroleum and potash — two areas that “have no obvious synergy” — also “suggests BHP will proceed with the Jansen project.”

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