U.S. Markets, April 1 – 5

The S&P 500 Index hit an all-time closing high early in the trading week at 1,570.25 points, but disappointing jobs data released on April 5 sent the index down 1% for the week to 1,553.28. The Dow Jones Industrial Average closed down 0.10% at 14,565.25. The U.S. Labor Department reported that the U.S. economy produced 88,000 new jobs in March, the weakest pace of hiring in nine months, and far fewer than many economists had forecast. The jobs data contributed to the biggest weekly decline for share prices so far this year.

Mountain Province Diamond shares reached US$4.69 — up US30¢, or 6.8% — after the company updated investors on progress at Gahcho Kué. The company and De Beers, its joint-venture partner, are confident that the project will receive a mining licence and announced they would be drilling new targets, with the first phase completed before the end of April. They also reported that winter deliveries of material, equipment and fuel were all delivered by the end of March.

Vale gained on bets that it could avoid paying $15 billion in taxes on earnings from its overseas operations. Brazil’s Supreme Court has postponed a ruling on the case for another week. Shares of Vale gained US4¢ per share to close at US$17.33.

On no news, Molycorp advanced US3¢, or 0.5% to US$5.23, after mining analyst Jon Hykawy of Byron Capital Markets published a bullish note on the company with a “buy” rating, a target price of US$15 per share and an argument that the “time to buy is sooner rather than later.” Hykawy noted that Molycorp could produce a kilogram of rare earth oxide, once all new equipment is in operation at Mountain Pass, for about US$7, while neodymium oxide sells outside of China for about US$74 per kg. “At 11,000 tonnes per annum of annual rare earth oxide production, and roughly 449 tonnes per quarter of potential didymium production, Molycorp could generate some $30 million in cash flow,” he wrote.

Shares of Cliffs Natural Resources continued their downward spiral, on no news, falling US56¢ per share to end the week at US$18.45.

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