US stocks end lower, Sept. 21-25

U.S. Federal Reserve Chair Janet Yellen reiterated increasing interest rates later this year, if the labour market improves and inflation returns to 2%. The U.S. Commerce Department reported that the country’s gross domestic product (GDP) expanded at a 3.9% annual rate from April to June, up from the expected 3.7%. In comparison, Canada’s GDP shrank by 0.5% in the second quarter.

The Dow Jones Industrial Average fell 0.4% to 16,314.67, while the broader S&P 500 Index retreated for the second straight week, closing down 1.4% to 1,931.34. Both indexes felt the impact of the news from Caterpillar, the world’s largest mining and construction equipment maker, which reported that it might cut up to 10,000 jobs by 2018, as part of its restructuring and cost-reduction plan, given the poor market conditions. Caterpillar expects this will reduce operating costs by US$1.5 billion a year. The stock closed the week down 9.6%, or US$6.88, at US$71.86.

The technology-heavy Nasdaq Composite Index dropped 2.9% to close at 4,686.50, and the spot gold price added US$6.40 per oz. to finish at US$1,146.30. This was not enough to boost the Philadelphia Gold & Silver Index, which tracks precious metals mining companies, and fell 2.9% to 47.27.

Timberline Resources climbed 7.7% to US49¢ per share, after closing the previously announced non-brokered private placement of 1.3 million shares at US37.5¢ per share with Waterton Precious Metals Fund II Cayman, LP, for nearly US$500,000 in proceeds. Timberline intends to use the funds to advance its gold projects in Nevada and for general working capital purposes. In September, Waterton offered to acquire Timberline for US58¢ per share in cash, representing a 76% premium to its Sept. 11 close. It also agreed to the recent private placement to de-risk the company financially if the transaction does not go through.

Uranium Resources dropped 43% to US76¢ per share, after soaring 81% on Sept. 18 to finish at $1.34 per share on no corporate news. The company is closing a merger with Australia’s uranium firm Anatolia Energy. Under the proposed June 3 deal, Uranium will exchange 0.06579 of its share for each Anatolia share, with its shareholders owning 59.4% of the combined company. On Sept. 23, Uranium shareholders voted in favour of the merger.