US markets rise, July 18–22

U.S. equities continued higher, helped by encouraging U.S. economic data and better-than-expected corporate earnings. The S&P 500 Index rose 0.6% to a 2,175.03 high. The Dow Jones Industrial Average advanced 0.3% to 18,570.85, while the Nasdaq Composite Index climbed 1.4% to 5,100.16. The gold spot price, however, fell 1.1%, or US$15 per oz., to US$1,322.10. The September contract for crude oil retreated 2.3% to US$44.19 per barrel, and the September contract for Brent crude dropped 2.7% to US$45.69 per barrel, after rising oversupply concerns.

McEwen Mining shares declined 15% to US$3.90. On July 25, the miner published second-quarter production results for its producing San Jose asset in Argentina and El Gallo in Mexico. It churned out 27,888 oz. gold and 875,006 oz. silver, or 39,555 equivalent oz. gold, relatively in line with the 39,164 equivalent oz. gold produced in the same period last year. McEwen expects to achieve its 2016 guidance of 144,000 equivalent oz. gold. The debt-free company ended June with US$57 million in cash and bullion. It will release its financial results in August.

Brazilian giant Vale rose 1.4% to US$4.26 per share, after reporting its second-quarter operational results on July 21. BMO analysts David Gagliano and Edward Sterck note the results were largely in line with their forecasts, with the exception of iron ore pellets and coal, which fell below expectations. Second-quarter iron ore output totalled 86.6 million tonnes, roughly 2.5 million tonnes lower than a year ago due to lower production. Pellet production, excluding Samarco’s attributable production, fell nearly 18% year-over-year to 10 million tonnes. Coal output came in at 1.5 million tonnes, down 25% over the same period last year. Vale expects to achieve the lower end of its 2016 iron ore guidance of 350 million tonnes, but dropped its previous 2017 guidance of 380 million to 400 million tonnes.

Agnico Eagle Mines lost US$2.34 per share to finish at US$53.73, after an armed robbery at the company’s La India gold mine in Mexico’s Sonora state. More recently, the company agreed to buy 14.9 million Belo Sun Mining shares in an underwritten public offering to keep its 19.2% interest in the junior. Agnico will pay 85¢ per share, for a total consideration of $12.7 million.