U.S. equity markets weakened in the four trading days Dec. 27-30, with investors reacting to an inversion in the yield curve for government notes. Ten-year U.S. Treasuries closed the year showing a yield of 4.338%, versus a yield of 4.358% for 2-year notes; an inverted curve is usually taken to suggest short-term tightening of the money supply.
That provided a neat divide between the golds, which rose strongly, and the base metal and fuel mineral companies, which mostly saw declines during the reporting period. Newmont Mining was typical of the golds, rising US$1.46 to US$53.40, while Phelps Dodge might be taken as typical of the base metal miners, dropping US$2.88 to US$143.87 — but even so, popping up to a new high of US$149.25 for the year. Offshore base metal producers did better; BHP Billiton rose US38 to US$33.42, and Anglo American closed US36 better at US$34.78.
At presstime, an explosion at the Sago coal mine of International Coal Group in Tallmansville, W.Va., had trapped 13 miners somewhere between the 11,000-ft. and 13,000-ft. run of a decline ramp. Drill holes into the workings showed high carbon monoxide levels but little explosion damage, raising some hope that the workers were still alive in clean air. The mine’s history suggests the explosion may have been coal dust rather than methane. Also, Sago’s lost-time injury rates in 2004 and 2005 were over two-and-a-half times the U.S. national average for coal mines and it had 208 safety violations in 2005.
International’s shares were down US3 at US$9.50 before the explosion, then slipped US14 to US$9.36 in trading on Jan. 3.
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