Energy and copper spur trading

TORONTO STOCK EXCHANGE

Energy companies dominated trading activity among resource stocks on U.S. markets over the July 19-25 report period, with a few mining companies giving them a run for their money.

Overall, trading on U.S. markets was more buoyant than some pundits had expected, with the S&P 500 Index up 9 points at 1,230. Trading activity was spurred by second-quarter results from several large American companies that in most cases showed earnings had outstripped initial expectations. Profit growth for some companies was in double-digit territory, even though bearish pundits had forecast single-digit gains not long ago.

A case in point is aluminum titan Alcoa. Earlier this month, Alcoa posted the highest quarterly income and revenue in the company’s history. Revenues in the latest quarter were US$6.8 billion, up 13% year-over-year, while net income was US$460 million, for a 14% gain over the second quarter of 2004. Alcoa was the most active trader over our report period, up US69 at US$28.36.

While some gold companies regained ground lost in recent weeks, copper producers attracted the most attention, partly because of strong demand, and partly because of fears that labour problems at several core operations could lead to production shortfalls.

Newmont Mining gained US$1.70 to settle at US$37.94, while Freeport-McMoRan Copper & Gold was ahead US$1.70 at US$40.35. Both companies operate mines that produce significant amounts of copper and gold, notably in Indonesia.

Among the pure-copper crowd, Phelps Dodge was the darling, posting an impressive gain of US$5.92 to close at US$107.11. The company is near its 12-month high of US$109, well above its 12-month low of US$69.80.

Placer Dome slid US24 to rest at US$14.80. Like many gold companies these days, Placer is looking at higher cash costs at several core operations, notably in Australia.