Weaker U.S. stocks stumble

With markets weakening across the board, mining stocks were generally lower on U.S. exchanges. The Dow Jones Industrial Average fell 119.07 points, or 1.3% of value, over the five trading days from June 26 to July 2, and the broader Standard & Poor’s 500 was down 2.8%, at 976.14 points.

The golds were pounded, following heavy selling in New York right before the weekend. AngloGold was down US$3.22 at US$25.47, while the other big South African, Gold Fields, closed at US$11.66, US$1.10 lower than a week before. AngloGold announced it had taken an additional 3.9% holding in Gold Fields on the open market, saying the move allowed it to consolidate Gold Fields’ results in its financial statements. Observers saw the purchase as part of a creeping takeover of Gold Fields, or as leverage in the event another company made a takeover bid; a 20% holding has the effect of making a takeover or merger impossible without AngloGold’s consent.

With platinum and palladium prices easing back a little, Stillwater Mining was down US$1.61 at US$14.35.

The base metal producers had not had a significant run over the past few weeks, so the pain on that side of the market was less intense. Phelps Dodge managed a modest rise of US14, finishing at US$40.24, while Southern Peru Copper slid US7 to US$14.79. Results were mixed for the Big Three, with Anglo American up US2 on the Nasdaq to close at US$16.47, BHP Billiton off US8 to US$11.61, and Rio Tinto plunging US$1.24 to US$72.96.