U.S. markets, Dec. 16-20

American markets continued their historic march for the period, with year-end selling not yet taking hold. The Dow Jones Industrial Average was up 462 points to 16,221.14 points, The S&P 500 was up 41 points to 1,818.32 and the Nasdaq Composite Index was up 85 points to 4,104.74 points.

The momentum came on the back of the Federal Reserve’s decision to modestly cut back on its quantitative easing program. While this may seem like bad news for investors, by removing uncertainty on the matter and by signalling that economic growth was strong enough to enact the measure, the Fed has increased investor confidence. It didn’t hurt that the Fed emphasized that short-term rates wouldn’t be going up.

Investors couldn’t make up their minds about the value of Northern Dynasty Minerals’ shares. Anticipating good news, investors bid up the company’s stock by 43% to US$1.63, making it the highest gainer in percentage points for the period. But when word came down on Dec. 23 that Rio Tinto told the company’s management that it might sell its 19.1% stake in the company, it wasn’t the news all the buyers of the shares were hoping for. Northern Dynasty shares abruptly reversed direction and were off 18% to US$1.34 at press time. The company is looking to develop the copper–gold–molybdenum Pebble project in southwest Alaska. On Dec. 13 it announced it had bought Anglo American’s stake in the project, giving it whole ownership.

Brigus Gold’s shares also got a lift, but held on to its gains. The company’s shares were up 23% to US74¢ per share, with the move in the right direction coming courtesy of a friendly $220-million offer from Primero Mining. The offer calls for Brigus shareholders to get 0.175 of a Primero share for each share held, as well as a 0.1 share in a spin-out company that would host Brigus’ Goldfields project in Saskatchewan, and the Ixhuatan and Huizopa projects in Mexico. The spin-out would begin with $10 million in cash. On a per-share basis the offer values Brigus at 91¢ a share — a 43% premium to Brigus’ 20-day, volume-weighted average trading price.

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