A bumpy ride for US markets, March 5-9 week

It was a mixed trading week for U.S. markets. The Dow Jones Industrial Average saw its worst one-day drop so far for the year, losing 203 points on March 6, following news that a debt-relief deal for Greece could trigger hefty losses for some banks. However, it made up for some lost ground on signs that the U.S. economy is heading in the right direction based on an upbeat jobs report for February. Overall, during the March 5-9 trading week, the Dow lost 55.55 points, or 0.4% to finish at 12,922.02 points.

The S&P 500 Index gained 1.24 points or 0.1% to 1,370.87, and the Nasdaq rose 0.4% or 12.15 points from the prior week, marking their fourth week of gains.

The spot price for gold dipped US$2.50 per oz. to end at US$1,713.50. In tandem with the slip in the yellow metal, the Philadelphia Gold and Silver Index slid 7.37 points to 186.85.

Molycorp was the week’s biggest percentage and value gainer, moving up 25.8% or US$6.34 per share to close at US$30.89. The boost came after the Colorado-based rare earth producer agreed to buy rare earth processor Neo Material Technologies for around $1.3 billion. Under the transaction, approved by both boards, Neo Material shareholders will receive $11.30 a share, comprising of $8.05 in cash and 0.122 of a Molycorp share. This represents a 42% premium to Neo Material’s March 8 closing price.

Following that news, investors pushed up the share prices of other rare earth explorers. Quebec-focused Quest Rare Minerals rose 17.6% to US$3 per share. The company is exploring two rare earth projects – Strange Lake and Misery Lake.

Rare Element Resources, which recently released a positive prefeasibility study for its Bear Lodge project in Wyoming, gained 14.5% or US78 to finish at US$6.15 per share. It was the third value gainer for the week, following Cabot’s, a speciality chemicals and performance materials company, US$1.80-per-share gain on no news. Avalon Rare Metals, which is exploring the Nechalacho deposit at Thor Lake, in the Northwest Territories, moved up 8.2% to US$2.88 per share. The companies released no other news during the week.

Alcoa, a leading producer of aluminum, was the week’s most actively traded stock, moving 127.4 million shares, but its share price slipped US43 to close at US$9.81. It reported that it started work to extend the product mix on the jointly-held aluminum complex in Saudi Arabia, which is under construction. Production from the smelter and rolling mill are expected to start in 2013, mine and refinery will follow in 2014.